ADVA Optical Networking SE — Annual Report 2025

Mar 30, 2026

Building a secure tomorrow

Annual report 2025

Contents

Welcome	3
Combined management report	4
Basis of preparation	5
Forward-looking statements	5
Strategy and control design	5
General economic and market conditions	6
Business development and operational performance of the group	7
Net assets and financial position of the group	11
Performance of Adtran Networks SE	16
Events after the balance sheet date	19
Disclosures under takeover law in accordance with Section § 289a HGB and Section § 315a HGB	19
Employees	22
Risk and opportunity report	23
Outlook	38
Declaration on corporate governance	39
IFRS consolidated	40
financial statement
Consolidated statements of financial positionas of December 31, 2025	41
Consolidated income statements for the financial yearJanuary 1 to December 31, 2025	43
Consolidated statements of comprehensive income	44
Consolidated cash flow statements	45
Consolidated statement of changes in stockholders' equity	47
Notes to the consolidated financial statements	48
Notes to the consolidated statement of financial position	63
Notes to the consolidated income statement	81
Other disclosures	87
Declaration of compliance with the German Corporate Governance Code	109
Affirmative declaration of the legal representatives	109
Independent auditor's report	110
Additional information	117
Report of the supervisory board	118
Corporate information	121
Financial calendar 2026	122

Welcome

Profile

Adtran Networks is a company founded on innovation and focussed on helping our customers succeed.

Our technology forms the building blocks of a shared digital future and empowers networks across the globe. We're continually developing breakthrough hardware and software that leads the networking industry and creates new business opportunities.

It's these open connectivity and synchronization solutions that enable our customers to deliver the communication, cloud1 and mobile services that are vital to today's society and for imagining new tomorrows.

Together, we're building a truly connected and sustainable future.

Mission

Adtran Networks enables differentiated, open next-generation networks. The group's mission is to be an innovation leader focused on its customers' experience by building better networking solutions.

2025 key performance indicators 2

1 Cloud in the context of IT describes a concept where applications no longer run on the user's in-house IT infrastructure (for example, a server) but are outsourced to a service provider whose IT infrastructure is not visible or known in detail – as if it was hidden in a cloud. A typical example is the use of software as a service, where the software is not stored on the user's machine, but on servers of the software service provider.

2 Pro forma EBIT is calculated prior to non-cash charges related to the stock compensation programs as well as amortization and impairment of goodwill and acquisition-related intangible assets. Expenses relating to anniversary payment obligations are excluded starting from 2025. Additionally, non-recurring expenses related to M&A, integration, professional fees relating to an internal investigation and other non-recurring personnel expenses as well as expenses related to restructuring measures are not included.

Combined management report

Disclaimer: Potential inconsistencies in the table values are based on rounding differences.

Basis of preparation

This report combines the group management report of Adtran Networks group ("the group", "Adtran Networks"), comprising Adtran Networks SE (hereafter also referred to as "the company", "Adtran Networks SE") and its consolidated subsidiaries, and the management report of Adtran Networks SE.

The combined management report of Adtran Networks SE was prepared in accordance with sections 289, 315 and 315e of the German Commercial Code (Handelsgesetzbuch, HGB) and German Accounting Standards (Deutsche Rechnungslegungsstandards) No. 17 and 20 (DRS 17 and 20).

All information contained in this report relates to the status on December 31, 2025, or the financial year ending on that date, unless stated otherwise.

The German Corporate Governance Code requires disclosure on the internal control and risk management system that go beyond the statutory requirements for the management report and are therefore excluded from the auditor's review of the content of the management report ("non-management report disclosures"). These are classified further to risk management and are explained in more detail in the chapter "risk and opportunities report".

Due to rounding, figures in tables may not add up exactly to the totals and percentages shown may not exactly reflect the absolute figures to which they relate.

Forward-looking statements

The combined management report of Adtran Networks SE contains forward-looking statements using words such as "believes", "anticipates" and "expects" to describe expected revenues, costs and earnings, anticipated demand for optical networking solutions and anticipated liquidity from which internal estimates may be inferred. These forward-looking statements are based on the beliefs of the management board and respective assumptions made, and involve a number of unknown risks, uncertainties and other factors, many of which are beyond Adtran Networks' control. If one or more of these uncertainties or risks materializes, or if the underlying assumptions of the management board prove incorrect, actual results can differ materially from those described in or inferred from forward-looking statements and information. Unknown risks and uncertainties are discussed in the "risk and opportunity report" section further below.

Strategy and control design

Following the registration of the domination and profit and loss transfer agreement with Adtran Holdings, Inc., Huntsville, Alabama USA (Adtran Holdings) on January 16, 2023, Adtran Networks has aligned its strategic objectives with the objectives of the group as a whole. Management at the highest group level of Adtran Holdings is based on revenues and Adjusted EBIT1 margin according to US GAAP for the Adtran Holdings group as a whole. These key figures are important key performance indicators for the Adtran Networks Group. In the 8-K report for the 2025 financial year published on February 26, 2026, the Adtran Holdings group reported revenues of USD 1,083.8 million and an Adjusted EBIT of positive USD 51.7 million representing an Adjusted EBIT margin of 4.8%. 2

In addition, for Adtran Networks SE's 2025 IFRS consolidated financial statements revenues and pro forma EBIT3 as a percentage of revenues (pro forma EBIT margin) are the key performance indicators for managing the Adtran Networks group. These key figures are reported to the management board and the supervisory board on a quarterly and annual basis. Unlike in previous years, net cash is no longer considered a key performance indicator, as it is not a control metric for the group and there are no targets set based on this metric.

This annual report continues to report on the previous key performance indicators.

1 Adjusted EBIT is defined as the Adtran Holdings group earnings before interest and tax, determined based on the audited financial results, and adjusted to remove any restructuring expenses; acquisition-related expenses and amortization of intangibles; stock-based compensation expense; the non-cash change in fair value of equity investments held in the deferred compensation plan; certain professional and other fees and any other non-GAAP exclusions approved by the compensation committee of Adtran Holdings, Inc. 2 Unaudited information.

Pro forma EBIT is calculated prior to non-cash charges related to the stock compensation programs as well as amortization and impairment of goodwill and acquisition-related intangible assets. Expenses relating to anniversary payment obligations are excluded starting from 2025. Additionally, non-recurring expenses related to M&A, integration, professional fees relating to an internal investigation and other non-recurring personnel expenses as well as expenses related to restructuring measures are not included.

General economic and market conditions

The global economy at the beginning of 2026

The International Monetary Fund (IMF) provided its latest assessment of the global economy on January 19, 2026. Global growth is projected at 3.3 percent for 2026 and 3.2 percent for 2027, revised slightly up since the October 2025 world economic outlook. According to the IMF, technology investment, fiscal and monetary support, accommodative financial conditions, and private sector adaptability offset trade policy shifts. 4

Global inflation is expected to fall, but US inflation will return to target more gradually. Key downside risks are reevaluation of technology expectations and escalation of geopolitical tensions.

Market environment for Adtran Networks

After exceptionally strong demand in 2022 and 2023, the optical networking sector experienced a significant slowdown in 2024, as many service providers delayed projects and worked through accumulated inventories. In 2025 the inventory overhang largely dissolved, with customer demand returning to normalized levels.

The growth drivers for Adtran Networks' markets regained strength, supported by an unprecedented investment boom in AI data centers, which is accelerating the demand for high-speed optical networks connecting AI training and inference facilities. The adoption of AI and ongoing digitization with the sustained expansion of cloud-based5 services, edge computing and dataintensive applications drive investment in high-performance optical networks. Remote and hybrid work models, combined with AI-driven business processes, remain structural drivers of bandwidth growth.

Government funding programs, particularly for broadband infrastructure, digital sovereignty and transformation as well as for critical infrastructure with climate-aligned technologies, continue to stimulate investment across key markets.

The telecommunications equipment landscape has been consolidating over the years, including major moves such as Nokia's acquisition of Infinera in 2025. Only a limited number of vendors with strong R&D, trusted technology, and robust financial and supply-chain resilience continue to succeed in Western markets. Security and geopolitical considerations are increasingly excluding low-trust vendors from critical networks, further benefiting suppliers with a proven track record of secure, standards-based solutions.

Adtran Networks continues to strengthen its position as a provider of secure and scalable fiber-optical transmission technology. The company's optical networking solutions remain a core differentiator, supporting high-capacity data transport across cloud, enterprise, and service provider networks. Its data center interconnect (DCI6 ) offerings and edge-optimized architectures enable the low-latency, high-bandwidth environment required for AI infrastructure.

In addition, Adtran Networks' precise synchronization portfolio delivers mission-critical timing for mobile networks, global data centers, and critical infrastructure, aligning with increasing customer requirements for ultra-reliable network performance. The expansion of the product portfolio also enables growth in adjacent industries such as utilities, finance and government networks, all of which are accelerating investment in secure digital infrastructure.

Market outlook

After a significant downturn in 2024 the addressable market grew to USD 11.3 billion7 in 2025 and is projected to reach USD 12.6 billion by 2029. The shift in demand from Asian vendors like Huawei to Western manufacturers is creating new opportunities, though their full impact is yet to be determined. The increasing need for secure communications technology in critical infrastructure is also opening new business avenues for Adtran Networks.

Overall, Adtran Networks remains competitive to capitalize on the rising importance of modern communications networks and the growing demand for security.

4 https://www.imf.org/en/publication/weo/issues/2026/01/19/world-economic-outlook-update-january-2026

5 Cloud-based in the context of how IT describes a concept where applications no longer run on the user's in-house IT infrastructure (for example, a server) but are outsourced to a service provider whose IT infrastructure is not visible or known in detail – as if it was hidden in a cloud. A typical example is the use of software as a service, where the software is not stored on the user's machine, but on servers of the software service provider.

6 Network that connects geographically dispersed data centers.

7 World market excluding China for metro and long haul WDM (CignalAI, "Transport Hardware & Markets Report", published December 2025), Ethernet access solutions and network synchronization (Adtran Networks own estimates)

Business development and operational performance of the group

Revenues

Revenues represent one of the two key performance indicators for Adtran Networks. In 2025, the group generated revenues of EUR 481.7 million, an increase of 10.0 % on revenues of EUR 438.1 million in 2024. In 2025, customers had utilized their inventory backlog and began ordering new products and services which drove a large part of the increase in revenue. As providers continue to move away from Asian suppliers, particularly in Europe, and the additional pressure applied to networks with the continued expanded use of AI and other high-bandwidth required tools, providers are constantly updating and improving their networks. The group reported revenues of EUR 130.2 million in Q4 2025. This corresponds to an increase of 2.0 % compared to Q3 2025 and of 9.5 % compared to Q4 2024. In Q4 there was an upturn in demand from some telecommunication providers which boosted the revenues along with some key enterprise projects.

In 2025, EMEA (Europe, Middle East and Africa) was again the most significant sales region amounting to 55.5 % of total revenues (prior year: 52.7 %), followed by the Americas reporting 34.4 % of total revenues (prior year: 35.1 %) and Asia-Pacific amounting to 10.0 % of total revenues (prior year: 12.2 %).

Year-over-year, EMEA revenues of EUR 267.6 million in 2025 were up from EUR 230.8 million in 2024. Adtran Networks continues to maintain a broad and loyal customer base in this region. The strong increase of 16.0 % compared to the previous year is mainly related to optical transport business.

In the Americas region, revenues also increased from EUR 153.9 million in 2024 to EUR 165.9 million in 2025. This is driven by increased demand from service providers and enterprise customers due to reduced customer inventories.

In Asia-Pacific, revenues slightly decreased from EUR 53.4 million in 2024 to EUR 48.3 million in 2025. Asia-pacific service revenues remained reasonably consistent, but showed declined business with our major carrier and enterprise customers.

Results of operations

(in millions of EUR, except earnings per share)	2025	Portion ofrevenues	2024	Portion ofrevenues
Revenues	481.7	100.0 %	438.1	100.0 %
Cost of goods sold	(317.2)	65.8 %	(282.3)	64.4 %
Gross profit	164.5	34.2 %	155.8	35.6 %
Selling and marketing expenses	(59.5)	12.3 %	(59.6)	13.6 %
General and administrative expenses	(32.3)	6.7 %	(31.9)	7.3 %
Research and development expenses	(109.8)	22.8 %	(108.0)	24.7 %
Other operating income and expenses, net	25.9	5.4 %	1.1	0.2 %
Operating income	(11.2)	(2.3) %	(42.6)	(9.7) %
Interest income and expenses, net	(2.4)	0.5 %	(3.0)	0.7 %
Other financial gains and losses, net	0.4	0.1 %	(1.3)	(0.3) %
Income before tax	(13.1)	(2.7) %	(46.9)	(10.7) %
Income tax expense (benefit), net	(8.8)	1.8 %	(15.8)	3.6 %
Net loss	(21.9)	(4.5) %	(62.7)	(14.3) %
Earnings per share (in EUR)
basic	(0.42)		(1.20)
diluted	(0.42)		(1.20)

Cost of goods sold and gross profit

Cost of goods sold increased from EUR 282.3 million in 2024 to EUR 317.2 million in 2025, primarily due to the higher revenues. Cost of goods sold includes amortization charges for capitalized development projects of EUR 45.1 million in 2025 after EUR 40.4 million in 2024.

Gross profit improved to EUR 164.5 million in 2025 after EUR 155.8 million in 2024, comprising 34.2 % of revenues in 2025 after 35.6% in the prior year. Changes in gross margin are impacted by customer and product-mix. The higher 2024 gross margin was especially driven by a one-time sale of perpetual software licenses to a Tier-1 customer.

Selling and marketing expenses

Selling and marketing expenses remained stable at EUR 59.5 million in 2025 after EUR 59.6 million reported in 2024 and comprised 12.3 % and 13.6 % of revenues, respectively.

Adtran Networks continues to focus on service offerings and direct contact with customers served via indirect distribution channels. Establishing direct contact enables the group to work more closely with its end customers and better understand their specific requirements, which in turn helps in developing market-relevant products.

General and administrative expenses

General and administrative expenses were at EUR 32.3 million in 2025, slightly above the EUR 31.9 million recorded in 2024. The share of total revenues was at 6.7 % in 2025 versus 7.3 % in 2024.

Research and development expenses

Net research and development expenses of EUR 109.8 million were slightly up from EUR 108.0 million reported in 2024, thereby constituting 22.8 % of revenues in 2025 after 24.7 % in the prior year. Capitalization of development expenses of EUR 40.0 million in 2025 were above the EUR 36.6 million seen in 2024 mainly driven by the increase in personnel costs and additional projects started throughout the year. The capitalization rate in 2025 amounted to 26.7 % (prior year: 25.3 %).

Adtran Networks' research and development activities focus on the development and enhancement of advanced solutions for its innovative connectivity and synchronization solutions. The resulting key technologies and products simplify complicated existing network structures and supplement existing solutions.

During 2025, research and development activities were focused on the following four technology areas:

• Enhancements to the open optical transport solution including the development of new terminal solutions such as M-Flex100 and the improvement of the Optical Line System to in terms of capacity and performance
• Development of a new generation of high-speed and cost-optimized network terminals
• Expansion of encryption technologies in our products to meet regulatory requirements regarding critical infrastructure
• Extensions to the Oscilloquartz product portfolio for network synchronization

Operating income

Net other operating income and expenses amounted to positive EUR 25.9 million in 2025, were significantly up from positive EUR 1.1 million in the prior year. Other operating income includes in particular income from the provision of services to the Adtran Holdings group of EUR 15.3 million (previous year: EUR 10.5 million) and subsidies for research projects amounting to EUR 9.6 million (previous year: EUR 8.5 million). In 2024, impairment losses on goodwill amounting to EUR 17.4 million were included in other operating expenses.

Total operating expenses decreased from EUR 198.4 million in 2024 to EUR 175.7 million in 2025, representing 36.5 % of revenues in 2025 after 45.3 % in the prior year.

Overall, Adtran Networks reported a negative operating result of EUR 11.2 million in 2025 after a negative operating result of EUR 42.6 million in the prior year. The improvement in the operating result was primarily due to successful cost management as a result of restructuring measures in previous years. In contrast to the current year, Adtran Networks reported impairment losses on goodwill of EUR 17.4 million in 2024.

Pro forma EBIT8 Margin

Pro forma EBIT margin represents one of the two key performance indicators for the group. As pro forma EBIT excludes noncash charges related to stock compensation, impairment of goodwill and amortization of intangible assets recognized in business combinations, expenses relating to anniversary payments as well as non-recurring expenses related to M&A, professional fees relating to an internal investigation, restructuring measures and other non-recurring personnel expenses, Adtran Networks' management board believes that pro forma EBIT margin is a more appropriate measure than operating income when benchmarking the group's operational performance against other telecommunications equipment providers.

The pro forma EBIT improved from negative EUR 10.2 million in 2024 to negative EUR 4.4 million in 2025, representing negative 2.3 % and negative 0.9 % of revenues, respectively.

8 Pro forma EBIT is calculated prior to non-cash charges related to the stock compensation programs as well as amortization and impairment of goodwill and acquisition-related intangible assets. Expenses relating to anniversary payment obligations are excluded starting from 2025. Additionally, non-recurring expenses related to M&A, integration, professional fees relating to an internal investigation and other non-recurring personnel expenses as well as expenses related to restructuring measures are not included.

Combined management report

The reconciliation of operating result to pro forma EBIT is as follows:

(in millions of EUR)2025	2024
Operating result(11.2)	(42.6)
Expenses related to share-based compensation3.2	5.9
Expenses related to anniversary payments0.9	—
Amortization of intangible assets from business combinations1.3	1.4
Impairment of goodwill—	17.4
Expenses related to M&A transactions, integration, restructuring expenses and other non1.4recurring expenses	7.7
Pro forma EBIT(4.4)	(10.2)

In 2025, the expenses related to M&A transactions, integration and restructuring expenses included no restructuring expenses (prior year: EUR 7.0 million).

Net income/(loss)

Given the improved although still negative operating result Adtran Networks reported a net loss of EUR 21.9 million for 2025, after a net loss of EUR 62.7 million in 2024. Beyond operating loss, the net result in 2025 included net interest expenses of EUR 2.4 million (prior year: EUR 3.0 million) and net other financial gain of EUR 0.4 million (prior year: net other financial loss of EUR 1.3 million).

In 2025, the group reported an income tax expense of EUR 8.8 million after an income tax expense of EUR 15.8 million in 2024, representing a tax rate of 66.96 % (previous year: tax rate of 33.75 %). In 2025, the income tax expense results mainly from the change in the valuation allowance for deferred tax assets on tax loss carryforwards and temporary differences at Adtran Networks SE. In 2024 the income tax expense mainly resulted from the reversal of deferred tax assets on the tax loss carryforwards of Adtran Networks SE.

Summary: Business development and operational performance

Despite the decreased gross margin in 2025 mainly due to successful cost management as a result of restructuring measures in previous years and an increased other operating income, the operating result of Adtran Networks improved in the current reporting period. Excluding the 2024 one-time impact due to the recognition of goodwill impairments operating costs in 2025 remained fairly stable. Thus, Adtran Networks reports a significantly lower net loss in 2025 when compared to the previous year.

Net assets and financial position of the group

Balance sheet structure

Adtran Networks' total assets decreased by EUR 53.2 million or 7.9 %, from EUR 670.0 million at year-end 2024 to EUR 616.8 million at the end of 2025.

Assets

Current assets decreased by EUR 39.0 million or 10.7 % from EUR 363.0 million on December 31, 2024, to EUR 323.9 million on December 31, 2025, and comprised 52.5 % of the balance sheet total compared to 54.2 % at the end of the prior year. The decrease in current assets was mainly driven by a decrease in receivables from the domination and profit and loss transfer agreement with Adtran Holdings, Inc. of EUR 23.8 million at the end of 2025 after EUR 47.1 million at the end of the previous year. The receivable related to the 2024 loss transfer has been fully paid by Adtran Holdings, Inc. In addition, an advance payment of EUR 6.2 million regarding the 2025 loss was made in December 2025. Other current assets also decreased significantly in particular due to a decrease in receivables from advance payments for inventories in connection with inventory reduction as well as declining receivables from funded research projects and from receivables from the sale of debt instruments of other companies by EUR 28.5 million to EUR 56.9 million at year-end 2025. The reduction of receivables from funded projects was partially due to the change of the assessment of the remaining term of one funding projects that resulted in a reclassification to the non-current receivable portion. Inventories were down by EUR 7.1 million to EUR 84.0 million. Inventory turns increased from 2.9x in 2024 to 3.5x in 2025. At the same time, cash and cash equivalents increased by EUR 16.6 million to EUR 43.6 million as of December 31, 2025. This related in particular to the positive development of results. Trade accounts receivable increased from EUR 108.6 million to EUR 112.8 million at the end of December 2025. DSOs9 remained fairly stable at 82 days in 2025 after 83 days reported in the prior year.

Non-current assets declined by EUR 14.2 million from EUR 307.1 million at year-end 2024 to EUR 292.9 million on December 31, 2025. Goodwill overall decreased by EUR 4.9 million to EUR 45.3 million at the end of 2025 due to foreign currency translation effects. Non-current assets declined by EUR 5.6 million to EUR 11.5 million at the current year-end mainly due to the reduction of expected funding volumes for research projects. Capitalized development projects decreased from EUR 100.6 million to EUR 94.9 million at year-end 2025 as the amortization of existing internally generated technologies exceeded the capitalization for new development projects. At the same time, other purchased and internally generated intangible assets increased mainly due to new license agreements by EUR 14.9 million to EUR 53.0 million at the current yearend. Deferred tax assets decreased by EUR 6.6 million to EUR 13.0 million at the end of 2025 Deferred tax assets and liabilities are presented net in accordance with relevant netting requirements.

Meaningful additional assets belonging to Adtran Networks are the broad and global customer base of several hundred service providers and thousands of enterprises, the Adtran Networks, Oscilloquartz and Ensemble10 brands, the vendor and partner relationships and a motivated and qualified global team. These assets are not recognized in the balance sheet.

9 Days Sales Outstanding: The key figure describes the average number of days between invoicing and receipt of payment.

10 Ensemble is a trademark used by Adtran Networks for the company's software solutions.

Liabilities

With respect to equity and liabilities, current liabilities slightly decreased by EUR 3.4 million from EUR 164.1 million12 at yearend 2024 to EUR 160.7 million at the end of 2025. Due to the consolidation of a special purpose entity in connection with a factoring agreement, the group continues to report a liability to banks as at December 31, 2025 amounting to EUR 18.5 million (prior year: EUR 21.5 million). The financial liabilities are explained in more detail in a separate section below. Other current liabilities at the end of 2025 include in particular obligations from subsidized research projects and decreased by EUR 5.5 million compared to December 31, 2024, mainly due to the change of the assessment of the remaining term of the funding period for one project. Current provisions fell to EUR 10.9 million as at December 31, 2025 compared to EUR 14.5 million at the end of the previous year. Trade accounts payables at EUR 45.2 million at the end of 2025 were EUR 3.4 million lower compared to prior year-end while DPO11 increased to 61 days in 2025 compared to 54 days in the previous year. On the other side, the current contract liabilities of EUR 37.5 million at the end of 2025, compared to EUR 25.7 million in the previous year significantly increased in particular due to the conclusion of new service contracts.

Non-current liabilities at EUR 68.1 million at year-end 2025 were significantly down from EUR 117.7 million reported at prior year-end. This was mainly due to the full repayment of the bank loan from the joint financing with Adtran Holdings, Inc. In the previous year, Adtran Networks had drawn EUR 46.9 million out of this agreement. Other non-current liabilities decreased from EUR 15.4 million at the end of 2024 to EUR 13.2 million as at December 31, 2025 as a result of decreased obligations from funded research projects. Non-current leases liabilities amounted to EUR 21.0 million at the end of 2025 after EUR 22.8 million reported at the previous year-end. Deferred tax liabilities decreased by EUR 1.0 million to EUR 11.0 million as of December 31, 2025.

Stockholders' equity remained stable at EUR 388.0 million at the end of 2025 after EUR 388.2 million reported at year-end 2024. The negative effect from the consolidated net loss for the year was offset by the loss absorption obligation of Adtran Holdings, Inc. in relation to the net loss for the year of Adtran Networks SE calculated in accordance with commercial law. The equity ratio improved to 62.9 % at the end of 2025, after 57.9 % at year-end 2024.

11 Days Payable Outstanding: The key figure indicates the average number of days between receipt of invoice and outgoing payment.

Capital expenditures

Capital expenditures for purchases of property, plant and equipment in 2025 amounted to EUR 11.5 million, slightly up from EUR 10.7 million in 2024.

Capital expenditures for intangible assets of EUR 62.4 million in 2025 were up from EUR 51.3 million in the prior year. This total consists of capitalized development projects of EUR 39.4 million in 2025 after EUR 36.5 million in 2024, and investments in concessions, software licenses and other intangible assets of EUR 22.9 million in 2025 after EUR 14.8 million in 2024. The increase in capital expenditure mainly relates to the capitalization of R&D software licenses. Investments in capitalized development projects are mainly driven by development activities for open optical transmission technology including the new S-Flex™ terminals and Adtran Networks' new generation of cloud access products with data rates of 100Gbit/s and network synchronization solutions.

Cash flow

(in millions of EUR)	2025	Portion of cash	2024	Portion of cash
Operating cash flow	82.3	188.5 %	63.0	233.2 %
Investing cash flow	(62.5)	143.1 %	(81.4)	301.0 %
Financing cash flow	(2.5)	5.8 %	12.6	46.4 %
Net effect of foreign currency translation on cash and cash equivalents	(0.7)	1.6 %	2.3	8.4 %
Net change in cash and cash equivalents	16.6	38.0 %	(3.5)	13.0 %
Cash and cash equivalents at the beginning of the period	27.0	62.0 %	30.6	113.0 %
Cash and cash equivalents at the end of the period	43.6	100.0 %	27.0	100.0 %

Cash flow from operating activities of EUR 82.3 million in 2025 was up by EUR 19.2 million from EUR 63.0 million in 2024. Higher outflows for working capital in 2025 compared to the prior year were overcompensated mainly by the lower loss before tax position and lower taxes paid.

Cash flow from investing activities was negative EUR 62.5 million in 2025 after negative EUR 81.4 million in the prior year. In 2025, the cash outflows mainly relate to investments in property, plant, and equipment and intangible assets. In 2024, an outflow for the granting of a loan to Adtran, Inc. was considered.

Finally, cash flow from financing activities was at negative EUR 2.5 million in 2025 down compared to the positive EUR 12.6 million in 2024. The net cash inflow in both years resulted in particular from the payment of receivables from the loss transfer in 2023 and 2024 by Adtran Holdings, Inc. In 2025, this inflow was overcompensated mainly by the outflow for the repayment of the bank debt.

Overall, including the net effect of foreign currency translation on cash and cash equivalents of negative EUR 0.7 million (2024: positive EUR 2.3 million), cash and cash equivalents increased by EUR 16.6 million in 2025, from EUR 27.0 million at year-end 2024 to EUR 43.6 million at the end of 2025, after reporting a decrease of EUR 3.5 million in the prior year.

Financing and liquidity

Adtran Networks' financing management is performed centrally by Adtran Networks SE. Its objective is to provide sufficient funds to ensure ongoing operations and to support the group's projected growth. Beyond the equity base, Adtran Networks finances its business by means of loans provided by Adtran Holdings, Inc., access to a USD 50.0 million subline under the Senior Secured Credit Facility, and liabilities with maturities typically exceeding the useful life of the assets being financed. For any liability taken, Adtran Networks is focused on minimizing related interest cost, as long as access to funds is not at risk. Excess funds are generally used to redeem liabilities.

Financial liabilities

In 2025, financial liabilities decreased by EUR 52.2 million to EUR 45.0 million at the end of 2025 largely due to the full settlement of a previously existing bank debt.

On June 4, 2024, Adtran Networks as additional debtor entered into a loan agreement (Senior Secured Credit Facility) of Adtran Holdings, Inc. with Wells Fargo Bank and other lenders. At December 31, 2025, Adtran Networks SE has not drawn any loan out of the subline (prior year-end EUR 46.9 million). Due to a factoring agreement concluded at the end of 2023, the group continues to report a current liability to banks in the amount of EUR 18.5 million as at December 31, 2025 (prior year: EUR 21.5 million).

Current lease liabilities slightly decreased by EUR 0.5 million, to EUR 5.6 million at the end of December 2025 while non-current lease liabilities decreased by EUR 1.8 million to EUR 21.0 million.

Further details about the group's financial liabilities can be found in notes (15) and (16) to the consolidated financial statements.

Net cash12

Adtran Networks net cash improved significantly by EUR 44.4 million from net debt of EUR 6.6 million at year-end 2024 to net cash of EUR 37.8 million at the end of 2025. This was in particular due to the increase in cash and cash equivalents with simultaneous repayment of a bank debt. Cash and cash equivalents of EUR 43.6 million on December 31, 2025, and of EUR 27.0 million on December 31, 2024, were invested mainly in EUR, USD and in GBP.

Net cash/(debt) as of December 31 is calculated as follows:

(in millions of EUR)	2025	2024
Liabilities to banks
current	(18.5)	(21.5)
non-current	—	(46.9)
Lease liabilities
current	(5.6)	(6.0)
non-current	(21.0)	(22.8)
Loans granted	15.4	16.4
Receivable from Adtran Holdings, Inc. due to the control and profit and loss transfer agreement	23.8	47.1
Cash and cash equivalents	43.6	27.0
Net cash (debt)	37.8	(6.6)

12 Net cash is calculated by subtracting total financial liabilities from cash and cash equivalents. Total financial liabilities comprise current and non-current financial liabilities to banks, including factoring agreements, as well as current and non-current financial receivables and liabilities to Adtran Holdings Inc. and Adtran, Inc., including receivables and liabilities from the domination and profit and loss transfer agreement and current and non-current lease liabilities in accordance with IFRS 16 Leases. A negative calculation result is referred to as net debt.

Summary: Net assets and financial position

Due to the improvement in cash flow from operating activities, cash and cash equivalents increased significantly. Adtran Networks' net assets and financial position improved in 2025 reporting increased cash and cash equivalents as well as an equity ratio of 62.9 %.

Transactions with related parties

Transactions with related individuals and legal entities are discussed in notes (40) and (41) to the consolidated financial statements.

Performance of Adtran Networks SE

In addition to reporting on the Adtran Networks group, the development of Adtran Networks SE is explained below. The financial performance indicator used to manage the company is revenue. As the course of business, including the business result and the situation of the Adtran Networks group and Adtran Networks SE were the same in the past financial year and the expected development with its significant opportunities and risks in the Adtran Networks group and Adtran Networks SE is also the same, please refer to the disclosures in the group management report for the forecast information on the financial performance indicator.

Adtran Networks SE prepares its annual financial statements in accordance with the provisions of the German Commercial Code. The corresponding complete financial statements are published separately.

Offices and organization

The company maintains its registered office in Meiningen, Germany. This is also the location of the main production and development facility of the company. In Martinsried/Munich, the company maintains its headquarter with all central functions and the sales and marketing organization. Furthermore, Adtran Networks maintains some small to midsize national and international offices.

Operational performance

In the past financial year, Adtran Networks SE generated sales totaling EUR 325.7 million. This corresponds to an increase of 7.8 % compared to sales of EUR 302.1 million in the previous year. In 2025 demand from customers recovered due to consumption of inventories. The increase for Adtran Networks SE is mainly visible in optical transport business as service providers aim to support the growing bandwidth demand and AI driven data traffic.

EMEA remained the most important sales region in 2025, followed by the Americas and Asia-Pacific. Sales in EMEA increased by 23.8 % from EUR 182.9 million to EUR 226.4 million. The share of total sales increased from 60.5 % in 2024 to 69.5 % in 2025. Adtran Networks SE achieved an increase in revenues in the EMEA region mainly due to increased optical transport business and continues to maintain a broad and loyal customer base in this region. In the Americas region, sales fell by 22.8 %, from EUR 73.2 million in 2024 to EUR 56.5 million in 2025. The regional share of total annual sales decreased to 17.4 % in 2025 after 24.2 % in 2024. This is due to lower demand from telecommunications service providers and internet content providers. In the Asia-Pacific region, sales decreased by 6.9 % from EUR 46.0 million in 2024 to EUR 42.8 million in 2025. The Asia-Pacific region contributed 13.1 % to total sales in 2025, compared to 15.2 % in 2024. Asia-pacific service revenues remained reasonably consistent, but showed declined business with our major carrier and enterprise customers.

Cost of sales increased from EUR 191.2 million 2024 to EUR 207.5 million in 2025. The share of sales revenue increased slightly from 63.3 % in the previous year to 63.7 %.

Gross profit changed from EUR 110.9 million or 36.7 % of sales in 2024 to EUR 118.2 million or 36.3 % of sales in 2025. The company's gross margin is impacted by customer- and product-mix. The higher 2024 gross margin was especially driven by a one-time sale of perpetual software licenses to a Tier-1 customer.

Selling and marketing expenses slightly increased to EUR 41.6 million in 2025 (previous year: EUR 41.3 million).

General administrative expenses remained almost constant at EUR 20.9 million in 2025 after EUR 20.8 million in 2024.

After the capitalization of internally generated intangible assets remained unchanged at EUR 40.0 million in 2025 compared with EUR 40.0 million in the prior year, research and development expenses amounted to EUR 109.3 million, or 33.6% of revenue, versus EUR 110.4 million, or 36.5 % of revenue, in the previous year.

Other operating result (other operating income less other operating expenses) increased from EUR 9.8 million in the previous year to EUR 14.6 million in 2025. Other operating income in 2025 was mainly affected by an write-up of investments in affiliated companies.

In 2025, income from profit transfers relating to the profit and loss transfer agreement between the company and ADVA Network Security GmbH (Berlin, Germany) amounted to EUR 11.9 million. No further income from affiliated companies was distributed to the company. In the previous year, profit distributions from subsidiaries (Adtran Networks North America, Inc (Norcross/Atlanta, USA), Adtran Networks (UK) Ltd (York, United Kingdom) and Adtran Networks Singapore Pte Ltd (Singapore)) amounted to EUR 18.2 million.

Summary: Operational performance

Despite higher sales revenues and improved operating results, the gross margin remained at the previous year's level in fiscal year 2025. The reported net loss was fully offset by the loss absorption of Adtran Holdings, Inc.

Net assets and financial position

Adtran Networks SE's total assets decreased by EUR 30.8 million to EUR 447.7 million as at December 31, 2025, compared to EUR 478.4 million on the previous year's reporting date.

Fixed assets increased from EUR 249.0 million to EUR 258.3 million, now representing 57.7 % of total assets, compared to 52.1 % at the end of the previous year. This increase is primarily due to an increase in intangible assets of EUR 8.4 million, from EUR 142.3 million in the previous year to EUR 150.7 million in 2025. Current assets decreased during the fiscal year from EUR 227.5 million in the previous year to EUR 186.0 million. As a result, current assets amounted to 41.6 % of total assets as of December 31, 2025, compared to 47.6 % at the end of 2024. This reduction in current assets is mainly attributable to a significant decrease in inventories, which fell from EUR 92.2 million in the previous year to EUR 71.4 million in fiscal year 2025. The primary reasons for this were, firstly, a reduction of EUR 17.9 million in advance payments for inventory. Secondly, receivables and other assets decreased by a total of EUR 25.4 million. While trade receivables increased by EUR 16.5 million, receivables from affiliated companies declined significantly by EUR 43.2 million compared to the previous year. This is mainly attributable to the lower loss absorption amount of EUR 23.8 million (previous year: EUR 47.1 million), which is still to be covered by Adtran Holdings, Inc.

Equity remained at EUR 278.9 million in 2025, the same as the previous year. Due to the decreased balance sheet total, the equity ratio rose to 62.3 % at the end of 2025 (previous year: 58.3 %).

Liabilities decreased from EUR 156.4 million in the previous year to EUR 126.3 million. This change resulted primarily from a reduction of EUR 45.5 million in liabilities to credit institutions due to a loan repayment. In addition, trade payables increased by EUR 4.2 million. Liabilities to affiliated companies also increased by EUR 5.2 million.

Provisions decreased from EUR 17.5 million in the previous year to EUR 15.5 million at the end of 2025.

Deferred revenue increased in 2025 from EUR 14.5 million in the previous year to EUR 15.8 million.

Capital expenditures

Investments in the 2025 financial year amounted to EUR 70.0 million (previous year: EUR 80.4 million). Of this amount, EUR 63.7 million (previous year: EUR 55.2 million) was invested in intangible assets, EUR 4.7 million (previous year: EUR 4.1 million) in property, plant and equipment and EUR 1.6 million in financial assets (previous year: EUR 21.1 million). The investments in intangible assets result in particular from the addition of internally generated industrial property rights and similar rights and assets. Investments in property, plant and equipment mainly comprise expenditure on technical equipment and machinery in the amount of EUR 4.1 million. The difference in additions to financial assets in 2025 compared to the previous year is mainly attributable to loans amounting to EUR 17.1 million granted to affiliated companies (Adtran, Inc., Huntsville, USA) in 2024.

Liquidity

The development of cash and cash equivalents analyses as follows:

(in millions of EUR)	2025	2024
Operating cash flow	46.7	(33.4)
Investing cash flow	(58.0)	(79.8)
Financing cash flow	15.9	109.4
Net change in cash and cash equivalents	4.6	(3.8)
Cash and cash equivalents at the beginning of the year	4.2	8.0
Cash and cash equivalents at the end of the year	8.8	4.2

During 2024 and 2025, the company was able to meet all payment obligations.

Cash and cash equivalents of EUR 8.8 million as of December 31, 2025, and EUR 4.2 million as of December 31, 2024, were largely held in EUR and USD. Despite the investment activities and the repayment of the Wells Fargo loan, cash and cash equivalents increased by EUR 4.6 million. This increase was primarily driven by loss compensation payments under the domination and profit and loss transfer agreement with Adtran Holdings, Inc., as well as by an advance payment under the profit and loss transfer agreement with ADVA Network Security GmbH. Consequently, net cash improved compared to the previous year. Net cash is calculated by subtracting total financial liabilities from cash and cash equivalents. Total financial liabilities comprise short-term financial liabilities arising from a factoring agreement newly concluded on December 19, 2023, as well as short- and long-term financial receivables and payables to Adtran Holdings, Inc., including receivables from the domination and profit transfer agreement. Furthermore, in fiscal year 2024, the company became an additional borrower in a senior secured credit facility agreement between Adtran Holdings, Inc., Wells Fargo Bank, and other lenders. As of December 31, 2025, Adtran Networks SE had not drawn amounts from this agreement.

Financing

Liabilities to banks decreased from EUR 52.8 million at the end of 2024 to EUR 7.3 million at the end of 2025. On June 4, 2024, Adtran Networks became an additional borrower in a credit agreement (Senior Secured Credit Facility) of Adtran Holdings, Inc. with Wells Fargo Bank and other lenders. The sixth amendment to the existing agreement provides a subline of USD 50.0 million available for borrowing by Adtran Networks SE. As of December 31, 2025, Adtran Networks SE had not drawn any loan from this agreement (previous year: EUR 46.9 million (USD 49.0 million)). Additionally, a short-term financial liability resulted from a factoring agreement concluded in 2023. Furthermore, there is a long-term intercompany loan with ADVA Network Security GmbH (Berlin, Germany) amounting to EUR 15.0 million as of the end of 2025 (previous year: EUR 15.0 million).

Dividend payments

Due to the domination and profit and loss transfer agreement concluded with Adtran Holdings, Inc. on December 1, 2022 and entered in the commercial register on January 16, 2023, the company did not distribute a dividend for 2024 in 2025 (previous year: zero for 2023). Adtran Networks SE does not plan to pay a dividend for the 2025 financial year either.

Summary: Net assets and financial position

Despite the investment activities and the repayment of the Wells Fargo loan, the asset and financial position of Adtran Networks SE improved in the 2025 financial year. This development was mainly driven by corresponding loss compensation and profit transfer payments. The cash flows from operating activities and investing activities showed positive development, while the cash flow from financing activities declined.

Events after the balance sheet date

On February 20, 2026, the United States Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). The ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain and are subject to further legal, regulatory, and administrative developments. Following the Supreme Court's decision, the U.S. presidential administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from all countries, in addition to any existing non-IEEPA tariffs. There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on the Company's business. The Company continues to monitor and evaluate these developments and assess their potential impact on the Company's business, financial condition, and results of operations.

There were no further events after the balance sheet date that might have a material impact on the net assets and financial position or the results of operations.

Disclosures under takeover law in accordance with Section § 289a HGB and Section § 315a HGB

Share capital and shareholder structure

On December 31, 2025, Adtran Networks SE had issued 52,054,500 ordinary no-par value bearer shares (December 31, 2024: 52,054,500). The ordinary shares entitle the holder to vote at the general meeting and to receive dividends in case of a distribution. No restrictions are attached to the ordinary shares. No other class of shares had been issued during the reporting period.

On December 1, 2022, Adtran Networks SE concluded a domination and profit and loss transfer agreement with Adtran Holdings, Inc. based at 901 Explorer Blvd NW, Huntsville, AL 35806, United States, as the controlling company, which was approved by the Annual General Meeting on November 30, 2022. Under this domination and profit and loss transfer agreement, Adtran Networks SE is obliged to transfer its entire profit to Adtran Holdings, Inc. The holders of the ordinary shares (with the exception of Adtran Holdings, Inc. as the majority shareholder) are entitled to a compensation payment under the existing domination and profit and loss transfer agreement.

On December 31, 2025, Adtran Holdings, Inc. held a total of 36,871,784 shares or 70.83 %* of the share capital of Adtran Networks SE (on December 31, 2024: 34,856,232 representing 66.96 % of the share capital).

* Capital shares refer to the total number of shares held in relation to the share capital as of December 31, 2025.

According to the voting rights notifications published until the end of 2025 in accordance with the German Securities Trading Act (Wertpapierhandelsgesetzt, WPHG), Raphael Kain held a total of 10.27% of the voting rights (including instruments), whereby Samson Rock Event Driven Master Fund Limited, Camana Bay, Cayman Islands, was specified as different shareholder directly holding at least 3 % of the voting rights. In the voting rights notification, Raphael Kain and Samson Rock Capital LLP are named in the full chain of controlled undertakings starting with the ultimate controlling natural person or legal entity. No other shareholder notified the company to hold more than 10 % of the company's voting rights as of December 31, 2025. Further details on share capital and shareholder structure are disclosed in note (21) to the consolidated financial statements.

Restriction of voting rights and share transfers

Neither the voting rights per share nor the transferability of the company's shares are subject to restrictions under company law. Nor was the management board of Adtran Networks SE aware of any agreements by shareholders relating to voting rights or the transfer of shares in the company at the end of 2025.

Appointment and dismissal of management board members

The appointment and dismissal of members of the management board of Adtran Networks SE follows the provision of the Council Regulation (EC) No. 2157/2001 of 8 October 2001 on the Statute for a European company (SE) ("SE Regulation") (Art. 39 para. 2, 46 para. 1 SE Regulation), the German Stock Corporation Act (sections 84, 85 AktG in conjunction with Art. 9 para. 1 lit. c) (ii) SE Regulation) and the provisions in section 6 of the company's current Articles of Association (last amended by resolution of the Annual General Meeting on June 27, 2025, which was entered in the commercial register on July 26, 2025). According to these articles, in principle the supervisory board appoints the members of the management board and does so for a maximum period of five years. However, it is the company's practice to appoint the members of the management board for two years only. Repeated appointment is possible. According to the company's articles of association, the management board of Adtran Networks SE shall regularly consist of two individuals and the supervisory board shall have the right to determine and appoint a higher number of individuals. If the management board consists of more than one individual, the supervisory board may appoint one member of the management board chief executive officer or speaker of the management board and another member his or her deputy. The supervisory board can only revoke an existing appointment for good cause (section 84 para. 4 AktG in conjunction with Art. 9 para. 1 lit. c) (ii) SE Regulation). In the 2025 financial year, Ulrich Dopfer resigned from his position as a member of the management board with effect from May 19, 2025. Timothy Santo was then appointed as a member of the management board of Adtran Networks SE with effect from May 29, 2025 up to and including December 31, 2026. Until May 19, 2025, Adtran Networks SE's management board consisted of Thomas Richard Stanton (Chief Executive Officer), Ulrich Dopfer (Chief Financial Officer) and Christoph Glingener (Chief Technology Officer). Since May 29, 2025, the management board of Adtran Networks SE consisted of Thomas Richard Stanton (Chief Executive Officer), Timothy Santo (Chief Financial Officer) and Christoph Glingener (Chief Technology Officer).

Changes to articles of association

Amendments to the Articles of Association of Adtran Networks SE are subject to the provisions of Art. 59 SE Regulation and Section 179 AktG. Pursuant to section 179 para. 2 sentence 1 AktG, amendments to the Articles of Association of an SE domiciled in Germany generally require a majority of at least three quarters of the share capital represented when the resolution is passed. The reference figure here is the number of votes validly cast in the vote on the resolution to amend the Articles of Association. Amendments to the Articles of Association must therefore be adopted by the Annual General Meeting with a majority of at least three quarters of the valid votes cast. In addition, the provisions in section 4 para. 6 and section 13 para. 3 of the company's current Articles of Association apply, according to which the supervisory board is authorized to resolve certain amendments to the wording of the Articles of Association, in particular to amend the wording of the Articles of Association in accordance with the scope of capital increases from authorized capital and the effectiveness of conditional capital.

Issuance and buy-back of shares

The rights of the management board to issue new shares are regulated in section 4 para. 4 of the articles of association of Adtran Networks SE. According to section 4 para. 4 of the Articles of Association of Adtran Networks SE, the management board, with the consent of the supervisory board, is authorized to issue up to 26,027,250 new shares from authorized capital, amounting to a total of EUR 26,027,250 against cash or contribution in kind with possible exclusion of subscription rights (authorized capital 2024/I). As of December 31, 2025, the authorized capital amounted to EUR 26,027,250, so that the authorization of the management board to issue new shares against cash or contribution in kind with the possible exclusion of subscription rights (subject to the detailed provisions of the current Articles of Association of the company) amounted to 26,027,250 shares or 50.00% of the outstanding shares as of this reporting date. In 2025, no new shares were created in this way. The conditional increase in share capital formerly existing pursuant to section 4 para 5k of the Company's articles of association (conditional capital 2011/I) has been canceled by a resolution of the general meeting on June 27, 2025, which was entered into the commercial register on July 26, 2025.

Besides, at year-end 2025, according to section 71 para. 1 lit. 8 AktG, the management board was authorized to buy back a maximum of 10.0 % of the existing share capital at the time of resolution of the general meeting or – if this value is lower – at the time the authorization is exercised. This right was granted to the management board by a resolution of the general meeting on June 28, 2024 until June 27, 2029. The shares may be used for all legally permissible purposes; in particular, with the approval of the supervisory board, the shares may be redeemed in whole or in part or transferred in return for contributions in kind, especially in connection with the acquisition of facilities, companies, parts of companies or equity interests in companies. In addition, the shares may be offered to employees of the company or its group companies for purchase or be transferred or, with the approval of the supervisory board, may also be sold in ways other than via the stock exchange under certain conditions.

Significant agreements subject to a change of control

The company is party to a credit agreement under which the company had no liabilities as of December 31, 2025 (prior yearend: USD 49,000,000). In the event of a change of control, the credit agreement grants the lenders the right to declare the outstanding amounts immediately due and payable and to terminate the credit facility. The company is party to a factoring agreement that can be terminated by the buyer of the receivables with immediate effect in the event of a change of control.

Combined separate non-financial report

Adtran Networks has chosen to prepare a combined separate non-financial report, which can be found in the Sustainability Statement 2025. This report is prepared in accordance with the requirements of Section 315b (3) of the German Commercial Code (HGB) and is hereinafter simplified as the "non-financial report". This non-financial report is prepared in accordance with § 315c in conjunction with 289c to 289e of the German Commercial Code (HGB) and the EU Taxonomy Regulation and has been subjected to a voluntary limited assurance engagement in accordance with ISAE 3000 (Revised) by KPMG AG Wirtschaftsprüfungsgesellschaft, Leipzig, regarding the relevant legal requirements.The non-financial report will be published on the website https://www.adtran.com/en/about-us/esg at the same time as the annual report on March 30, 2026.

Employees

On December 31, 2025, Adtran Networks had 2,215 employees worldwide, including 33 apprentices (prior year: 2,118 including 41 apprentices).

On average, Adtran Networks had 2,174 employees during 2025, up from 2,088 in 2024. Furthermore, there were 20 and 19 temporary employees working for Adtran Networks at year-end 2025 and 2024, respectively.

Personnel expenses in the group slightly increased from EUR 208.3 million in 2024 to EUR 212.5 million in 2025, representing 47.5 % and 44.1 % of revenues, respectively.

On December 31, 2025, Adtran Networks SE had 612 employees, thereof 33 apprentices (prior year: 600 employees, thereof 41 apprentices). This corresponds to a total increase of 12 employees or 2.0 % compared to the previous year.

The breakdown of employees of Adtran Networks SE by functional area is as follows:

	2025	2024	Change
Purchasing and production	174	157	17
Sales, marketing and service	97	106	(9)
Management and administration	90	93	(3)
Research and development	218	203	15
Apprentices	33	41	(8)
Total employees	612	600	12

Personnel expenses in the Adtran Networks SE slightly increased from EUR 59.1* million in 2024 to EUR 60.6 million in 2025, representing 20.7 % of revenues in 2025 compared to 14.1 % in 2024.

*) Prior year adjusted.

The employee compensation packages comprise fixed and, at some hierarchy levels, variable elements and stock units. These compensation packages enable employees to participate appropriately in the success of the group, and support employee retention, while at the same time rewarding individual efforts, teamwork, innovation and productivity. Furthermore, they should also enable individual achievements to be recognized as well as promote team spirit, innovation and productivity. In addition, employees are regularly honored for special achievements and extraordinary commitment through the group's spot award program.

In addition, the group is committed to offering all employees comprehensive on-the-job training, as well as specific continuing education opportunities in order to advance their personal and professional development. The group offers different types of continuing education programs based on employee development needs. These needs are identified, documented, and reviewed semi-annually, within an electronic performance appraisal and competency management system.

Within Adtran Networks, all relevant local regulations for health and safety in the workplace are complied with, and in some countries are regularly monitored by independent engineering offices for safety in the workplace.

Adtran Networks is committed to the creation of a workplace free of discrimination and harassment. The group recruits, hires, trains and promotes individuals at all job levels without regard to race, religion, ancestry, sexual orientation, marital status, national origin, age, gender and physical or mental disability. Adtran Networks is committed to a fair and equitable workplace where everyone is a respected and valued member of the team. The group's core values (ONE – Ownership, Nurture and Excellence) guide employees and managers in all business activities.

An efficient employee representation without trade union ties (with a global Works Council - Adtran Networks SE Works Council and a local Works Council - Betriebsrat at the Meiningen site in Germany) is in place on a global basis, reflecting the international employee base and overall orientation of the group.

At its main production and development facility in Meiningen, Germany, Adtran Networks currently provides 33 apprenticeship positions, whereof 20 lead to professions as electronics technician for equipment and systems, industrial management assistant, electronics technician for information and telecommunications systems and as warehouse logistics expert. In Meiningen, Germany, the company is among the most recognized apprenticeship providers for industrial electronics professions in its region for a long time. In addition, Adtran Networks offers a dual study program in Germany which combines a university degree with firmly integrated practical on-the-job work experience in the company. This enables the students to put the knowledge they have learned into practice in a direct context. Currently 13 students are trained within this program.

Risk and opportunity report

Adtran Networks' future development offers a broad variety of opportunities. It is however also subject to risks, which in certain cases could endanger the group's continued existence. The management board has implemented a comprehensive risk management and internal control system that enables the detection of risks in a timely manner and allows the group to take corrective action and to benefit from identified opportunities. An integral aspect of the group's strategy is its ability to anticipate developments in the marketplace and future customer needs. Special emphasis is given to product development, the quality of the group's products and the validation, selection and oversight of key business partners.

Risk management system

Since Adtran Networks was founded as ADVA Optical Networking in 1994, its business has become more diversified. The group markets its products and solutions in part via a variety of distribution partners but has become less dependent on these partners over the years due to continued investment in a direct distribution model in core geographies. Beyond focusing on enhancing revenue and profit predictability, a comprehensive risk management system has been established which is coordinated by the Internal Audit and Risk Management function.

Being a globally operating company, Adtran Networks implemented its risk management system on the basis of applicable laws and regulations and by considering common international standards and best practices such as the COSO13 framework and the ISO14 31000 standard. Additionally, it integrates supporting management systems such as especially the group's compliance management. The management board nevertheless recognizes that a risk management system cannot in all cases prevent the occurrence of events that may cause material damage to the group.

Adtran Networks' strategic goals are set by the parent company Adtran Holdings, Inc. They build the basis for Adtran Networks' risk management system and are organized into four areas: people and culture, growth and profitability, operational efficiency and portfolio and innovation. The strategic goals are reviewed and updated on a yearly basis and constitute the basis for Adtran Holdings' annually updated three year business plan. Adtran Networks' three year business plan is a subset of, and forms an integral part, of Adtran Holdings' three year plan. Each of the strategic goals is defined in detail and then broken down into specific departmental and individual targets. The strategic goals are traced to each employee so that every individual can focus and be evaluated on the own performance and contribution to Adtran Networks' overall success.

Adtran Holdings measures the accomplishment of its strategic goals against revenues and Adjusted EBIT15. These metrics represent the key performance indicators.16 Adtran Holdings management board sets target values for these metrics for the year to come and measures actual values against the target values for revenues and adjusted EBIT on a quarterly basis and annually. Corrective action is taken quickly should a deviation from the plan occur or be reasonably predicted to occur. This information is summarized and communicated to the management board in quarterly and yearly reports. Key performance indicators on the Adtran Networks' level are revenues and pro forma EBIT margin. All of these metrics are measured quarterly and yearly. The results are presented to, and discussed by the Adtran Networks supervisory board.

Budgets are reviewed on Adtran Holdings, Inc. level on a monthly basis and adjustments are made if necessary. The Adtran Holdings' accounting, controlling and treasury departments provide to the executive management of Adtran Holdings, Inc. globally consolidated reports on available cash funds and the development of margins and current assets (e.g., inventories and receivables) on a quarterly basis. These reports also include budgeted, forecasted and actual revenues and expenditures. On the level of Adtran Networks budgets are reviewed quarterly; outcomes of these reviews are reported to the supervisory board. The structure and content of these reports is continuously adapted to the most current requirements.

Adtran Holdings, Inc. regularly monitors the creditworthiness of its customers, including customers of Adtran Networks, and updates credit limits as needed. Material expenditures and investments must be approved in advance through an electronic purchase order system. In conjunction with continuously updated revenue and cash forecasts, a detailed monthly preview of the anticipated group development within the next three to twelve months is put together and communicated to the management board. Moreover, the group's accounting, controlling and legal departments review potential legal and litigation risks on a quarterly basis in order to obtain a reliable estimate of the potential loss, considering all relevant information and expectations. Adtran Networks' management board discusses all significant business transactions with the supervisory board and obtains its approval if necessary.

13 Five major accounting organizations formed a group known as COSO (Committee of Sponsoring Organizations of the Treadway Commission) to provide guidance on evaluating internal control. They issued this guidance as the COSO Internal Control Framework.

14 ISO is an organization that defines and publishes internationally valid standards. Several of the ISO standards are relevant to Adtran Networks, including 9001 (quality management), 14001 (environmental management system), 22301 (business continuity management), 31000 (risk management) and 50001 (energy management).

15 Adjusted EBIT is defined as the Adtran Holdings group earnings before interest and tax, determined based on the audited financial results, and adjusted to remove any restructuring expenses; acquisition-related expenses and amortization of intangibles; stock-based compensation expense; the non-cash change in fair value of equity investments held in the deferred compensation plan; certain professional and other fees and any other non-GAAP exclusions approved by the compensation committee of Adtran Holdings, Inc. 16 Unaudited information

Combined management report

In order to ensure observance of all applicable laws and regulations and to support the group's ongoing growth and internationalization, Adtran Holdings', Inc. executive management implemented a compliance management system which applies to and integrates Adtran Networks. Key compliance measures include a code of conduct, a range of group-wide policies, the training of employees and the active encouragement to report suspected incidents of non-compliance and to seek support in case of uncertainties or questions.

All implemented measures and processes of the risk management system as well as of the compliance management system are continuously reviewed and improved.

Adtran Networks differentiates between two main categories of risks and opportunities – those considered major and those considered non-material. A risk or opportunity is considered major if its expected net impact on the group's pro forma EBIT17 is or exceeds EUR 3 million in terms of Adtran Networks' three-year business plan. If not attributable to the pro forma EBIT, Adtran Networks' net income is used as reference. The expected net impact is calculated by multiplying the potential net impact of a particular risk or opportunity with its net likelihood of occurrence.

For each major risk, the group assigns a dedicated risk owner who is responsible for defining and implementing an adequate and effective response for risk mitigation. Adherence with this process is monitored by Adtran Networks' internal audit and risk management function which conducts structured reviews with each risk owner according to a defined schedule and at a minimum once per quarter. Should any such major risk materialize, the assigned risk owner has the responsibility to immediately report this to the executive management. Independent of specific risk ownership, all employees of Adtran Networks are compelled to escalate additional material risk items directly and informally to Adtran Networks' internal audit and risk management function and the chief financial officer. Management provides Audit Committee with the Risk Report at least once per year. The overall responsibility for risk early warning system lies with the management board.

Based on the outlined analytical tools and processes, Adtran Networks ranked 16 risks as major risks at the end of 2025, which are discussed in detail below.

Adtran Networks' risks are aggregated by means of Monte Carlo simulations. The total risk is compared to Adtran Networks' risk bearing capacity to identify potentially existence-threatening accumulations of risks. In case aggregated risk assessment exceeds risk bearing capacity, the management board is immediately informed to initiate counter measures and to reduce the risk exposure.

Both the internal control system and the risk management system are subject to continuous monitoring of processes and systems. Where weaknesses have been identified, appropriate improvement measures have been implemented to address them and to ensure the ongoing enhancement of these systems and processes.

Based on an overall assessment of the adequacy and effectiveness of the internal control and risk management system taking into account the scope of the company's business activities and its risk environment — there were no indications that these systems are inadequate or ineffective.18

The risks and opportunities of Adtran Networks SE essentially correspond to those of the Adtran Networks group. In addition to the risks listed here, there is also a risk with regards to the fluctuation of income from investments and the recoverability of shares in affiliated companies. Adtran Networks does not consider these risks to be material.

In preparation of the 2025 Annual Report, the impact thresholds ("risk buckets") used for risk classification and heat map visualization were adjusted. The previous impact ranges applied in 2024 (Low: EUR 0–1 million; Moderate: EUR 1–5 million; Material: EUR 5–15 million; Very Material: > EUR 15 million) were revised to the following intervals in 2025: Minor: EUR 0–3 million; Moderate: > EUR 3–6 million; Material: > EUR 6–14 million; Very Material: ≥ EUR 15 million. The likelihood categories remained unchanged. The adjustment was made to achieve a more balanced distribution of risks within the heat map and to enhance transparency and analytical clarity in the presentation of the Company's risk profile. The change does not reflect an increase in the underlying risk exposure but represents a refinement of the classification methodology.

17 Pro forma EBIT is calculated prior to non-cash charges related to the stock compensation programs as well as amortization and impairment of goodwill and acquisition-related intangible assets. Expenses relating to anniversary payment obligations are excluded starting from 2025. Additionally, non-recurring expenses related to M&A, integration, professional fees relating to an internal investigation and other non-recurring personnel expenses as well as expenses related to restructuring measures are not included. 18 The disclosures in this paragraph are so-called non-management report disclosures. This is unaudited information.

Major risks 2026-2028

1.	Uncompetitive product(s)due to delayed release(s)	5.	Ransomware, Phishingattack, denial of serviceattack (Cyber Risks)	9.	Inability to retainthe talent with the competencies required to meetkey objectives	13.	Data breach or network/service outage occur due toa security issues in products
2.	Uncompetitive product cost	6.	Geopolitical risks	10.	Persistent multiple productissues	14.	Inability to perform newcustomer productintroductions/homologations
3.	Global economic slowdown(Macroeconomic risks)	7.	Exchange rate risks	11.	Global Trade Tension: Riskof tariffs, counter-tariffs andsanctions	15.	Management of proprietaryinformation / intellectualproperty
4.	Uncompetitive product dueto technological disruption	8.	Excessive or obsoleteinventory	12.	Compliance violations	16.	High dependency ofconcentrated spend on keyvendors

Growth and profitability risks

Geopolitical risks

possible; material (previous year - likely; material)

This risk encapsulates the potential negative impacts on global and regional markets due to geopolitical tensions, trade disputes, and political instabilities. These factors contribute to an unpredictable business environment, affecting supply chains, market access, and overall economic stability. The global business operations of Adtran Networks are being threatened by conflicts or rising tensions between countries which could lead to sanctions, trade embargoes, or military actions, impacting global trade relations. Among the risk factors are changes in government, policy unpredictability, or internal conflicts within countries that can affect Adtran Networks business operations and market conditions, wars and armed conflicts between countries (such as the continuing Russian invasion of Ukraine) and activities of terrorist organizations (which led to the Israel-Hamas armed conflict, including associated Houthi-led disruptions in the Red Sea shipping routes). Additional factors include escalating tensions in the Taiwan Strait, which could disrupt critical semiconductor supplies for the telecommunications sector.

Consequences of this risk realization could be incarnated in difficulties in sourcing materials, increased costs, and delays in production and delivery, restrictions on market entry, increased tariffs, and non-tariff barriers affecting competitiveness and profitability and shifts in consumer preferences and demands due to economic uncertainty or nationalistic sentiments.

The management of Adtran Networks chose to adopt the following mitigation strategies: reducing when possible the dependency on a single country or region for supplies, adapting business strategies to quickly respond to changing market conditions and continuously monitoring the geopolitical landscape to anticipate and prepare for changes.

The probability of geopolitical risks has declined over the reporting period, primarily due to significant enhancements in the resilience and agility of Adtran Networks' supply chain compared to nine months prior. Additionally, strategic initiatives undertaken have successfully reduced the company's operational dependency on China, further diminishing exposure to potential geopolitical disruptions.

Macroeconomic risks

possible; very material (no changes since the last year)

As an international player, Adtran Networks is exposed to the economic cycles of many countries and territories worldwide. Economic downturns may lead to reduced demand for telecommunication equipment and, subsequently, a reduction in revenues and margins.

The performance of Adtran Networks faced significant challenges during 2023-2025. During the global semiconductor crisis many customers had built up large inventories to mitigate supply chain risks and were depleting these stocks during the last two years. At the end of 2024 customer demand recovered materializing in increasing order intake. Management expects a further recovery in sales driven by improved supply chain conditions and sustained market demand.

Central banks have begun to cautiously ease their monetary policies in Europe and the United States, signaling potential support for economic recovery. In the euro area, the European Central Bank (ECB) has paused further rate cuts after initial easing earlier in 2024, adopting a data-dependent stance amid ongoing economic uncertainty. In Germany, inflation is expected to remain subdued, reaching 2.3% in 2025, 2.2% in 2026 and falling below 2.0% in 202719. In contrast, inflation trends in the United States remain uncertain. Although inflationary pressures have moderated compared to previous years, inflation remains above the Federal Reserve's target of 2%. The Federal Reserve has therefore maintained a cautious monetary policy stance and continues to assess the appropriate timing of potential interest rate adjustments. At the same time, trade policy developments, including the introduction of additional tariffs on imported goods, may contribute to higher production costs and consumer prices. Furthermore, geopolitical developments and potential energy price volatility continue to pose upside risks to inflation.

Adtran Networks will continue to closely monitor macroeconomic developments and will adjust its strategy and tactical direction accordingly.

Global Trade Tension: risk of tariffs, counter-tariffs and sanctions possible; moderate (new in 2025)

Escalating global trade tensions, including unpredictable tariffs, counter-tariffs, and sanctions, pose a significant risk to Adtran Networks. Such trade disruptions may materialize suddenly, leaving insufficient time to implement effective countermeasures or transfer increased costs to customers. This scenario could negatively impact profitability, disrupt supply chains, increase production costs, and diminish competitive positioning in critical markets.

To mitigate these threats, Adtran Networks has undertaken strategic measures, including exiting external manufacturing operations in China to reduce tariff exposure. The company is enhancing its analytical tools to accurately model potential tariff impacts on specific customer accounts, coupled with active dialogues with key customers to manage these trade risks effectively. Additionally, critical supplier dependencies, particularly for optics, power supply units (PSUs), and printed circuit boards (PCBs), are being reviewed on a continual basis to increase supply base diversification to mitigate potential tariff impacts. Concurrently, the sourcing team continues active requests for quotations (RFQs) to identify and qualify alternative suppliers, including accelerating the in-sourcing of selected products to the Huntsville facility, thereby enhancing operational resilience and reducing geopolitical exposure.

19 European Commission. Economic Forecast for Germany 2026-2027

Exchange rate risks

very likely; moderate (no changes since the last year)

Exchange rate risk, also known as currency risk, refers to the potential for financial losses due to fluctuations in foreign currency exchange rates. For Adtran Networks this risk manifests in several ways:

• 1. Transaction exposure that arises from the company's commitments to receive or make payments in foreign currencies.
• 1. Translation exposure that pertains to the consolidation of financial statements from international subsidiaries operating in various currencies into the parent company's euro-denominated financial statements. Exchange rate movements can alter the reported value of assets, liabilities, revenues, and expenses of these subsidiaries, affecting the Company's overall financial position and performance.
• 1. Economic exposure also known as operating exposure, this involves the long-term impact of exchange rate changes on the company's future cash flows and market value. For example, a sustained appreciation of a foreign currency where a subsidiary operates can increase local costs and expenses, potentially affecting Adtran Networks' profitability in that region.

Adtran Networks employs various hedging strategies, such as forward contracts, to mitigate transaction and translation exposures. Additionally, Adtran Networks prices products in euros where feasible. At the Adtran Holdings level, currency fluctuations provide a natural hedge, balancing financial exposures across the organization. However, in Adtran Networks there is an exchange rate risk with significant impact on the financial performance, as the company's cost of goods sold is primarily denominated in U.S. dollar while sales are primarily conducted in Euro, British pound, and U.S. dollar.

Adtran Networks SE has an exposure to foreign currency exchange rate risk due to US tariffs.

Portfolio and innovation risks

Uncompetitive product(s) due to delayed release(s) likely; very material (previous year: likely; material)

High competition and rapid technological change are the decisive characteristics of the market for innovative connectivity solutions for cloud and mobile services. Continuous success not only requires the identification of innovative solutions for future network and customer requirements by maintaining cost leadership, but to also release such innovations at the projected time as delays may undermine their competitiveness.

To mitigate the risk, Adtran Networks SE focuses its development efforts on areas where meaningful differentiation can be achieved with sufficient resource allocation. The company continuously improves R&D efficiency through enhanced tooling and systematic measurement of throughput and development cycle times, enabling earlier identification of bottlenecks and delays. In parallel, structured risk management practices are applied within development projects to proactively identify, assess, and mitigate technical and execution risks. Closer collaboration with selected key customers, including joint and iterative development approaches, ensures early validation of requirements and faster alignment with market needs. Additionally, Adtran Networks maintains close cooperation with key partners and suppliers to improve coordination across the value chain and support timely product delivery.

The impact of this risk has increased due to several factors: limited R&D capacity to meet existing customer product and feature requests, intensified competitive pressure from key industry players with significantly larger R&D budgets and resources, rapid technological advancements driving disruptive market changes.

Uncompetitive product cost

possible; very material (previous year: possible; material)

Adtran Networks achieves cost advantages through its ability to scale economically and through the optimization of product design. The loss of competitive product cost would drastically reduce the group's success in winning new business and would have a negative effect on gross and operating margins. The significant pricing pressure for innovative connectivity solutions must be met strategically by improving processes, controls and technology while maintaining adequate R&D budgets, as well as operationally by achieving cost leadership in sourcing product components. A dedicated team identifies competitive price and cost targets for new products, monitors product cost changes throughout the development process and negotiates, tracks and forecasts product and related component costs.

The achievement of the annual cost reduction targets for sourcing components is tracked by quarterly status reports. The establishment of parallel production lines in different territories to mitigate geopolitical and supply chain risks leads to an increase in capital expenditures and operational cost. Adtran Networks diligently assesses the advantages and disadvantages of second sources and parallel production lines versus the additional cost incurred.

Combined management report

Intense pricing pressure persists, driven by ongoing competitor consolidation, increased economies of scale, and substantial growth in R&D investment. This trend is further amplified by the industry's accelerating shift toward vertical integration.

Assessment category of this risk increased from "material" to "very material" due to changes of the categories' intervals. Quantified assessment of risk did not change and comprises to EUR 6 million (considering the likelihood and impact). The change in the risk impact category from "material" to "very material" is attributable to revised category thresholds. In 2025, an impact of EUR 15 million is classified as "very material", whereas in 2024, impact of EUR 15 million was deemed "material".

Uncompetitive products due to technological disruption possible; very material (previous year: possible; material)

Adtran Networks' products or services may become uncompetitive as a result of technological advancements and innovations in the market. Technological disruption often leads to appearance on a market of new, more efficient, or more appealing products, which can quickly make existing offerings of Adtran Networks obsolete or less desirable. This risk may realize due to the following internal factors: wrong product strategy, inefficiencies in product development, inadequate resource allocation, poor project management, or technical challenges. External factors that may cause products or services to become uncompetitive are among others: market shifts, regulatory hurdles and the dependency on external partners and suppliers. The risk of a potential technological disruption is remediated by continuous reviews of market and product requirements, implementing efficient product development processes to minimize delays, incorporating risk assessment in the planning stage to foresee and mitigate potential causes of delay, ensuring effective communication and coordination among different departments and external partners and by having backup plans for potential setbacks in the product development lifecycle.

Assessment category of this risk increased from "material" to "very material" due to changes of the categories' intervals. Quantified assessment of risk did not change and comprises to EUR 6 million (considering the likelihood and impact).

Inability to perform new customer product introductions / homologations unlikely; material (no changes since the last year)

For a telecommunications equipment and software producer, the introduction of new products to customers is pivotal for sustaining competitiveness, driving revenue growth and maintaining a technological leadership position in the industry. Should Adtran Networks be unable to solve internal factors such as limited resources, missing features, the inability to react fast enough and to adapt to external factors like changing market demands, evolving regulatory and security requirements and increased competition, the group's development could be impacted negatively. Since some of the group's competitors operate in a broader market and have considerably more resources available due to their greater size, Adtran Networks must continue to focus its efforts on investing in research and development to support customer homologation, ensuring that product quality meets both internal standards and external regulatory requirements and keeping abreast of market trends and customer needs to align product development. In addition, the group has implemented the Issue Tracker. This contrivance is being used by Technical staff and Quality Management Team to track high priority issues, align on status and correctness of the chosen approach. Another tool utilized by an internal integrated business unit is quarterly business reviews (QBR) on which integrated metrics are being analyzed. Adtran Networks also makes special emphasis on improved customer-specific testing and stays updated with changing regulations and ensuring compliance to facilitate smooth homologation.

The likelihood of this risk continues to be low due to the establishment of a dedicated team, led by the Chief Technical Officer in collaboration with the sales department, to proactively address potential delays in product homologation and network management integration.

Operational efficiency risks

Ransomware, phishing attack, denial of service attack possible; material (previous year - likely; moderate)

The integrity, confidentiality, and availability of our information systems and data remain crucial to the functioning of our business processes and, consequently, to the Company's success. Cyber-attacks against organizations continue to escalate globally in both frequency and sophistication, with midsize companies like Adtran Networks increasingly becoming prime targets.

Cybercrimes are perpetrated by a diverse range of actors, from individual hackers to professional organizations, some operating on behalf of national governments. The motives behind these cyber-attacks are equally varied, encompassing ransom extortion, industrial espionage, and sabotage. Cyber-crimes are committed by a wide range of perpetrators ranging from single hackers to professional organizations partially operating on behalf of national governments. The motives for cyber-attacks are similarly wide ranging from ransom extortion to industrial espionage and sabotage. Preventing from, and combating cyber threats is a never-ending challenge which in Adtran Networks is accomplished by a series of measures.

Germany continues to be significantly affected by cyber extortion attempts. A 2025 survey revealed that cybercrime and sabotage have cost German companies approximately EUR 289.2 billion20 in the past year, marking an 8% increase from the previous year. Notably, 87% of German companies were affected by data theft, espionage, or sabotage (up from 81 % previously). The financial impact of cyberattacks specifically has risen to EUR 202.4 billion21, now accounting for 70 % of all damages caused by theft or sabotage. Ransomware remains the most critical threat, with 34 % of companies reporting they were affected by such attacks—nearly triple the rate recorded in 2022. In these very serious cyber crimes, criminals are increasingly using AI and automated tools to encrypt victims' data and demand ransoms, a trend confirmed by the Federal Office for Information Security (BSI) as the greatest current danger in cyberspace.

Adtran Networks employs a comprehensive, multi-layered approach to cybersecurity, combining advanced technology with proactive measures. The strategy includes 24/7/365 SOC monitoring by CrowdStrike, enhanced email security, Next-Gen firewall architecture, and continuous vulnerability scanning for public-facing systems, complemented by internal scans every 30 days. Key tools like CryptoSpike for storage protection, Endpoint Detection and Response (EDR), and DDoS-protective firewalls bolster defenses. As part of our continuous improvement, Adtran deployed an AI-based email filter that has significantly reduced phishing emails. Regular backups, software updates, and quarterly cybersecurity training enhance preparedness, while credential protection and specialized identity security tools further safeguard against identity-based threats. This robust framework ensures round-the-clock protection against evolving cyber risks.

Data breach or network / service outages due to a security issue in deployed products likely; minor (previous year – very likely; moderate)

This risk involves the possibility of a data breach or a disruption in network or service operations due to security vulnerabilities in products that Adtran Networks has deployed. This can include software, hardware, or online services. Such incidents can lead to unauthorized access to sensitive data, loss of data integrity, and interruption in essential services. Data breach or network/ service outages which occur as a result of a security issue in deployed products may lead to a loss of customer's trust if seen as negligence and could result in claims for compensation. Roadmap commitments might get missed as fixing a severe security issue could absorb R&D resources for a significant time. New shipments might get on hold until the security issue is fixed.

Among the risk factors are important factors such as software and hardware vulnerabilities, inadequate security measures, advanced cyber attacks and third party risks. The impact of incidents could be significant, including customers' service disruption, loss of sensitive data, financial losses, erosion of customers' confidence.

The management of Adtran Networks included various mitigation strategies to control this risk: proper internal secure product development standards (SPLC – secure product life-cycle) are in use, as well as adequate product security incidents response teams (PSIRT) for all products. Adtran Networks utilizes regular security audits and assessments: thorough security reviews of products to identify and address vulnerabilities. Robust security protocols are engaged for implementing strong security measures, including encryption and multi-factor authentication.

Continuous monitoring and incident response planning is being performed: Adtran Networks established systems for continuous monitoring and having a well-defined incident response plan. Employees are being educated on security best practices and the importance of compliance. Vendor and third-party management processes are: ensuring that third-party components and services meet security standards. Monitoring and reporting: implementing systems for ongoing monitoring of security threats and vulnerabilities and regularly reporting on security status and incidents.

In addition to the reasons outlined above, the change in the risk impact category from "moderate" to "minor" is also attributable to revised category thresholds. In 2025, an impact of EUR 0–3 million is classified as "minor" and EUR 3–6 million as "moderate," whereas in 2024, impacts of EUR 0–1 million were deemed "low" and EUR 1–5 million classified as "moderate."

Dependency of concentrated spend on key vendors unlikely; moderate (new in 2025)

Adtran Networks relies on a certain number of key vendors for critical components and technologies, some of which are singlesourced and not readily substitutable. This high concentration of spend and technological dependency increases vulnerability to supply chain disruptions, vendor-specific operational issues, quality deficiencies, or financial instability. Any interruption in supply from these vendors - whether due to geopolitical factors, regulatory changes, capacity constraints, or contractual disputes could lead to production delays, increased procurement costs, and potential loss of market opportunities. Furthermore, reliance on proprietary or single-sourced technologies may limit flexibility in sourcing alternatives, prolong recovery times, and increase the cost and complexity of transitioning to alternative suppliers.

20 The source is: https://www.bitkom.org/Bitkom/Publikationen/Studie-Wirtschaftsschutz

21 The source is: https:/www.bitkom.org/sites/main/files/2025-10/bitkom-study-economic-security-2025.pdf

To reduce the dependency on key vendors and single-sourced technologies, Adtran Networks SE:

• 1. Pursues a strategy of technology and supply chain diversification wherever possible and economically reasonable.
• 1. Where introducing a second source is possible, the company works closely with key partners to develop alternative supply options. In cases where a second source cannot be established, Adtran implements buffer strategies at multiple layers of the supply chain to ensure continuity of supply and mitigate the impact of potential disruptions.
• 1. The architectural flexibility of network designs allows a specific customer use case to be fulfilled in various configuration options that differentiate in products-in-use and with that vary in cost and feature set.

Excessive or obsolete inventory

very likely; moderate (previous year - likely; moderate)

Adtran Networks normally purchases components based on customer orders or forecasts. However, in some situations such as during the semiconductor crisis, or if lead times of single components heavily exceed standard lead times, Adtran Networks may opt on buying components on stock in order to reduce throughput times and customer lead times. Pre-purchasing materials for products without firm orders bears the risk that customers will not demand relevant products. Pre-ordered materials reserved for a certain customer project is often reusable in other customer projects (standard components). Some components, however, cannot be used in any other customer project (non-standard components). Adtran Networks tries to reduce the pre-purchasing of non-standard materials to a minimum in order to limit the obsolescence risk. Despite our close alignments with customers, careful material demand analyses and other means to limit inventory risks, there is a residual risk that components on stock exceed customer demands or cannot be used in any customer project and cannot be resold to other market players, or can be sold, but at a price below the purchasing cost.

Assessment category of this risk increased from "likely" to "very likely" due to changes of the categories' intervals. Neither likelihood nor impact of this risk did not change since last year and its quantified assessment comprises to EUR 3 million.

Persistent multiple product issues (Unsatisfying supplier and manufacturing quality) unlikely; very material (new in 2025)

Adtran Networks' product quality is significantly influenced by its suppliers and contract manufacturers. Failure of a single part may cause the whole system to be dysfunctional. Early detection of component as well as production deficiencies is thus critical for the group's success. Deteriorating quality levels could not only lead to delays in installation, return of products or cancellation of orders, but also to penalties and lawsuits, contract terminations and liability claims. Preventive actions to avoid quality deterioration include close collaboration with key suppliers during the development of critical components, structured and tool based processes for supplier and manufacturer identification and qualification, robust contracting including adequate indemnifications, and regular audits of key suppliers and all manufacturers. Adtran Networks conducts continuous and thorough monitoring and analysis of product quality KPIs and reviews customer escalations weekly for timely resolution. Quality personnel are dedicated to each product unit and monitors the entire lifecycle of Adtran Networks' hardware and software. Internal and external audits are performed to ensure TL/ISO compliance and that our processes support robust quality practices.

Management of proprietary information / intellectual property likely; minor (new in 2025)

This risk encapsulates the potential negative impacts on the company's competitive position, innovation capabilities, and financial performance due to inadequate management, protection, or enforcement of proprietary information and intellectual property (IP). As a global provider of telecommunications equipment, software, and networking solutions, Adtran Networks relies heavily on its portfolio of patents, trade secrets, copyrights, trademarks, and proprietary technologies, including hardware designs, software algorithms, and network management systems. These assets are critical for maintaining technological leadership in areas such as fiber-optic transmission, Ethernet-based solutions, and broadband infrastructure. Risk factors include unauthorized disclosure or theft through cyberattacks, employee misconduct or inadvertent leaks, infringement by competitors or counterfeiters, supply chain vulnerabilities, challenges in enforcing IP rights across diverse international jurisdictions with varying legal frameworks, and alleged third-party IP infringements.

Consequences of this risk realization could manifest in loss of competitive advantage, erosion of market share, increased legal and litigation expenses, regulatory penalties for non-compliance, reputational damage, and reduced revenue from diminished product differentiation or forced licensing agreements. In severe cases, it could hinder the company's ability to innovate and respond to market demands, impacting long-term growth in the telecommunications sector. The executive management of Adtran Networks has adopted the following mitigation strategies: implementing comprehensive IP management policies and regular audits, enhancing cybersecurity measures including encryption and intrusion detection systems, providing employee training on IP handling and confidentiality, pursuing strategic patent filings and enforcement actions, diversifying supply chains to reduce vulnerability, and establishing a solid response protocol for alleged IP claims, involving an internal expert team and specialized counsels.

To mitigate the risk Adtran Networks has implemented a multi-layered approach including the ongoing review and enhancement of global training and awareness programs to reinforce the importance of safeguarding sensitive information across the organization. Furthermore, all agreements involving intellectual property ownership or licensing rights are subject to thorough legal review to ensure clarity, enforceability, and alignment with corporate interests. The Company also maintains structured oversight of IP licenses and settlement arrangements to ensure proper management, compliance, and risk minimization in connection with third-party engagements.

People and culture risks

Inability to retain the talent with the competencies required to meet key objectives possible; material (no changes since the last year)

The ongoing digital transformation is advancing rapidly, exacerbating the global shortage of skilled talent, particularly within the technology industry. While competition for talent is most pronounced in developed economies, it remains a challenge worldwide, also because of demographic developments. Adtran Networks faces increasing pressure to retain and develop its workforce to safeguard the critical knowledge, skills, and relationships necessary for the development, selling, and maintenance of its innovative products and solutions.

Following the 2023 merger of ADVA and Adtran, Adtran Networks is currently in a post-merger integration phase. Organizational changes and synergies inherent to such mergers can bring some degree of uncertainty among employees, while the blending of two corporate cultures presents additional challenges. Moreover, the integration of systems and processes can lead to increased workloads and stress, further contributing to potentially decreased employee motivation levels and attrition.

Temporary constraints in attracting new talent may arise as some individuals prioritize stability over an evolving work environment. However, organizational transformation can also appeal to highly motivated and creative professionals seeking dynamic career development opportunities. To address these challenges, Adtran Networks remains committed to meeting employee expectations by offering a range of flexible work models, personal and professional development opportunities and fostering a supportive, innovative workplace culture.

Compliance violations

likely; minor (previous year - likely; moderate)

Adtran Networks' markets its products and solutions in part via a variety of distribution partners due to required economies of scale, local (legal) requirements and in order to benefit from existing contractual as well as personal relationships and post-sale support organizations and capabilities. While the group's ability to control the partners' activities are limited, compliance violations by intermediaries may, under specific circumstances, be attributed to Adtran Networks. For mitigation, Adtran Networks implemented robust risk-based due diligence procedures including upfront vetting of new intermediaries and periodic reviews and updates. In addition, Adtran Networks' sales agreements contain clauses in which the intermediaries guarantee compliance with the rules. Existing commission-based compensation is tightly controlled and new contracts are avoided where possible.

Adtran Networks also recognizes the potential risk of legal claims or proceedings arising from possible allegations of harassment or discrimination in the workplace. Such claims may be initiated by employees, customers, or other stakeholders and can involve matters related to gender, race, age, sexual orientation, religion, disability, or other characteristics.

To mitigate the risk, Adtran Networks has implemented robust measures, including the development and enforcement of comprehensive anti-harassment and anti-discrimination policies and trainings. The company ensures accessible, confidential reporting mechanisms are in place and encourages a "speak-up culture" through its Code of Conduct and 24/7 Whistleblower Hotline. Furthermore, all employees are required to complete anti-discrimination corporate training. Should an incident be reported, it will be address through the prompt and fair internal impartial investigation process, reinforcing the organization's commitment to a safe, inclusive, and respectful work environment.

Assessment category of this risk decreased from "moderate" to "minor" due to changes of the categories' intervals. Quantified assessment of risk did not change and comprises to EUR 1.46 million (considering the likelihood and impact).

Minor and financial risks

Beyond the discussed 16 major risks, there is a broad range of minor risks that can also have a negative impact on Adtran Networks. These uncertainties include financial risks as well as the risk of customer defaults, balance sheet risks such as the impairment of intangible assets, and changes in interest rate levels. Uncertainties also exist with regards to the timing of carrier investment cycles and to distribution partnerships, to legal risks pertaining to potential claims under product and warranty liabilities as well as patent rights, to secure confidentiality of personal and business sensitive data. Risks relating to energy supply and risks from possible acquisitions are also worth mentioning. The management board of Adtran Networks does not consider any of these risks or other uncertainties to have a major impact on the group in case of their occurrence.

Changes to the overall risk situation and classified major risks in 2025

The overall risk profile of Adtran Networks SE in 2025 reflects a moderate shift compared to the previous year. Several key risks remain unchanged in their assessment, including global economic slowdown (macroeconomic risks), exchange rate risks, inability to perform new customer product introductions/homologations and inability to retain talent with the competencies required to meet key objectives.

The assessment of certain risks has increased during the year. These include uncompetitive product(s) due to delayed release(s), uncompetitive product cost, uncompetitive products due to technological disruption, various cyber risks (including ransomware, phishing attacks and denial-of-service attacks) and excessive or obsolete inventory.

Conversely, the assessment of several risks has decreased due to improving external conditions and targeted mitigation measures. These include geopolitical risks, compliance violations, and data breach or network/service outage due to security issues in deployed products.

In addition, four new risks have been included in the short list for 2025: global trade tension, referring to the risk of tariffs, counter-tariffs and sanctions being imposed unpredictably, management of proprietary information / intellectual property, the risk due to high dependency on concentrated spend with key vendors and persistent multiple product issues.

In the previous year, a going concern risk was reported in connection with a loan agreement concluded with Adtran Holdings Inc. and the resulting financial dependency. During 2025, the loan was fully repaid and, concurrently, significantly higher cash reserves were built up. While the 2024 annual report anticipated a temporary excess of aggregated risk over risk-bearing capacity in the first half of 2025, the current forecast for 2026 indicates that aggregated risks remain well within the group's available risk-bearing capacity. Consequently, no going concern risk exists as of the reporting date.

Opportunity identification

The identification of opportunities is largely identical to the processes, tools and concepts as described in the "risk management system" section above. The annual definition of the group's opportunities is supported by the management board, which has regular discussions with key customers and industry thought leaders in order to identify new opportunities and technological trends. Throughout the group, agile processes maximize the group's ability to take advantage of newly identified trends. Current major opportunities are as follows:

Market share gains in Europe

very likely; very material (no changes since the last year)

The Covid-19 pandemic and global supply chain disruptions have underscored the critical importance of digitization and secure communication networks in sustaining the economy. At the same time, escalating geopolitical tensions have driven a fundamental reevaluation of strategies in both politics and business. The use of networking technology from questionable origins is increasingly viewed negatively, prompting many European countries and companies to reduce reliance on large Chinese network equipment suppliers, particularly Huawei. Furthermore, the recent global silicon shortage exposed vulnerabilities in supply chains, leading European network operators to reconsider their vendor landscape and favor partnerships with suppliers that are regionally "local." For Adtran Networks, as an established company headquartered in Europe, these dynamics create significant opportunities. The opening of the Terafactory in Meiningen, Germany, further strengthens Adtran Networks' credibility as a trusted local supplier. Additionally, the acquisition of Infinera by Nokia marks a major market consolidation, creating a more concentrated competitive environment with fewer choices for Western network operators. This shift offers Adtran Networks a unique chance to differentiate through agility, innovation, and customer-centric solutions, positioning the company to capture market share.

Portfolio cross-selling

likely; very material (previous year - very likely; very material)

Adtran Networks operates in three distinct technology areas: open optical transmission technology, programmable cloud access solutions and high-precision network synchronization. In addition to a variety of opportunities in each of these technology areas, the group sees a high likelihood of cross-selling these solutions into Adtran, Inc.'s customer base. The combined company educates traditional broadband-only customers of Adtran and has started to win cross-selling opportunities.

Additional demand for bandwidth and services through artificial intelligence (AI) very likely; very material (previous year - likely; material)

Artificial intelligence could become the catalyst for a new optical network build cycle. The largest cloud service providers are constructing gigawatt AI training centers, and communication service providers (CSPs) are responding with connectivity at hundreds of Terabit/s scale. There is a significant bandwidth opportunity to connect the enterprise data lakes with the AI training centers. Optical transport solutions play a pivotal role in supporting emerging AI-driven middle-mile networks by addressing the unique demands of artificial intelligence workloads. In addition to the bandwidth opportunity, Adtran Networks sees that more and more customers are using the company's range of services in the planning, construction and commissioning phase of their high-capacity networks. The company is continuously expanding its service catalog, for example using machine learning and AI to offer new services for improved network resilience. The pandemic and geopolitical tensions have increased the demand for data-driven insights and services to automate and protect networks. Further significant revenue increases are possible.

Information technology security

very likely; very material (previous year - very likely; material)

Large enterprises and government agencies are concerned about the security of their data and business processes and are therefore building new data backup and data storage solutions, which in turn require transmission technology to link sites. In addition, the EU's General Data Protection Regulation (GDPR), which came into force in 2019, is leading to increased data protection requirements for all companies operating in Europe. A few years ago, network technology primarily had to provide cost-effective bandwidth. Today, the focus is increasingly on security. This inevitably has an impact on the technical realization of the cloud as well as customers' selection of manufacturers. Adtran Networks is the one remaining European specialist in optical transmission technology and a reliable partner for thousands of companies. Its ConnectGuard™22 security portfolio offers customers comprehensive protection in different network scenarios and brings numerous competitive advantages. With the founding of Adva Network Security (ANS) in 2022, the company showed its strong commitment to this highly relevant market. As a German company with strong visibility and presence with data center and network operators worldwide, ANS anticipates a positive market environment with additional opportunities in security-related infrastructure.

22 Brand name for Adtran Networks' encryption technology, implemented in many of the company's products.

New markets for synchronization solutions very likely; material (no changes since the last year)

In addition to mobile network operators' increasing demands for high-precision synchronization solutions, Adtran Networks' Oscilloquartz technology is gaining traction in other applications. Most notably, securing critical infrastructure against GNSS23 failures has become increasingly important, opening opportunities with government agencies and operators of mission-critical infrastructure. Also relevant are the synchronization of global databases of internet content providers, the accuracy of timestamps for financial trading, the synchronization of power grids with distributed generation, time distribution in digital infrastructure deployment, and the synchronization of media networks. All these applications offer additional opportunities for this product portfolio.

Expansion of addressable market and share gains through decarbonization possible; material (no changes since the last year)

The climate change and resulting threats to our planet are largely driven by the high global CO₂ emissions. The transport of goods and people has played a not insignificant role in this. In addition, of course, the energy consumption of communication networks is also increasing as data traffic grows. This creates opportunities for Adtran Networks: on the one hand, communication technology enables numerous economic processes, as well as processes of daily life to function with significantly less mobility. Home office and video conferencing significantly reduce the need for business travel in many industries. The aspect of "green thanks to ICT" – i.e., more resource-efficient processes through the use of communications technology to replace the need for trips and flights – is stimulating network expansions in many countries of the world and having a positive effect on the growth of Adtran Networks' addressable market. On the other hand, Adtran Networks' activities in the area of sustainability are highly advanced. These are described in detail in the separately published sustainability report. The company is making considerable efforts to sustainably improve the energy efficiency of its products and operational processes, which are yielding noticeable results. The company's innovation can reduce the energy consumption of communications networks. Adtran Networks' customers, some of whom have set very ambitious climate targets, benefit from these improvements and appreciate the company's efforts. Now that some countries even require CO₂ levies to be paid, this also creates an economic advantage for network operators and, in turn, a competitive advantage for Adtran Networks.

Additional sales opportunities from ongoing market consolidation likely; very material (previous year - possible; material)

Vendor consolidation in optical networking technology will continue. Nokia acquired Infinera, a supplier of optical networking solutions, in a $2.3 billion deal. The acquisition further reduces the number of competitors in that space and will dilute Nokia's European profile. Adtran Networks is the remaining European specialist in open optical networking technology and has built a positive reputation among its customer base. A consolidated competitive landscape can lead to slower market price erosion and new opportunities for Adtran Networks to win additional customers as a primary or secondary supplier. The merger with Adtran strengthens Adtran Networks' market power and generates additional economies of scale.

Vertical integration for cost reductions in product components and new markets very likely; moderate (previous year - likely; moderate)

Adtran Networks is increasingly investing in the development of optoelectronic components. These investments enable greater vertical integration and greater independence from suppliers. On the one hand, this leads to an improved cost structure for certain functions in Adtran Networks' systems. On the other hand, Adtran Networks benefits from an expansion of the total addressable market (TAM). The pluggable transceiver modules of the successful MicroMux family, as well as the 100ZR module developed jointly with Coherent, a global leader in materials, optics, and lasers, will make an increasing contribution to consolidated revenues and margins in 2026 and beyond, with strong growth potential.

Exchange rate opportunities

very likely, moderate (previous year - very likely; material)

As explained above in "exchange rate risks", at present, major uncertainties exist about the future development of foreign currency exchange rates relevant for Adtran Networks. These can have a negative as well as a positive impact on Adtran Networks' revenues and results. As Adtran Networks plans the foreign exchange rates at the budgeting time at expected balanced rates, there are equal risks and opportunities resulting from foreign exchange.

23 GNSS refers to a constellation of satellites transmitting positioning and timing data from space. GNSS receivers determine their location by using that data. By definition, a GNSS provides global coverage.

Changes to the overall opportunity situation and the classified major opportunities in 2025

The company sees itself well positioned to take advantage of various market opportunities, which include increasing demands driven by broadband stimulus, artificial intelligence (AI), information security requirements, and high-precision synchronization required by new customer groups. The efforts of the western developed countries to remove Huawei and ZTE equipment from their networks continue to provide additional opportunities in a consolidating market. With its well-rounded portfolio of hardware, software and service offerings, Adtran Networks has a strong foundation for great performance.

Overall opportunity and risk assessment

Based on careful inspection of the group's opportunity and risk profile at the time of the preparation of the combined management report, the management board of Adtran Networks believes that the group's opportunities offset the risks. Adtran Networks overall balance between opportunities and risks is higher than the one at the time of the publication of the prior year's combined management report.

In 2026, the aggregated risk exposure remains below the company's risk-bearing capacity. Accordingly, Adtran Networks has sufficient headroom to absorb the potential materialization of the risks described above. The development of risk exposure and the risk-bearing capacity is subject to ongoing monitoring.

Internal controls related to financial reporting

The management board of Adtran Networks is responsible for establishing and maintaining an adequate system of internal controls. It has implemented an internal control system that enables the management board to ensure completeness, accuracy and reliability of financial reporting at group and legal entity level. When designing its internal control system, Adtran Networks used the COSO framework as a key reference and source of guidance. The internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting. No system of internal control over financial reporting, including one determined to be effective, may prevent or detect all misstatements.

Control environment

The control environment is the foundation of the internal control system in every organization. Adtran Networks fosters an environment of openness and integrity with a clear commitment to excellence, competence and the development of its employees. The group's leadership principles of integrity/honesty, decisiveness and respect are based on this philosophy, and the culture is reflected in the overall tone set by the management board. Adtran Networks has a clear organizational structure with well-defined authorities and responsibilities. The bodies charged with the governance and control of the group actively participate in the running and steering of the business. The business is managed on a global basis and run via functional areas. Financial steering of the group and financial stewardship for individual legal entities is handled by the chief financial officer, under the audit committee's guidance.

In 2023 due to the merger with Adtran, which was already listed on NASDAQ, Adtran Networks (ex-ADVA) had devoted considerable effort to ensure its consolidated operations meet the requirements set forth by the Sarbanes-Oxley Act (SOX). In 2023 the focus was on the implementation and testing of existing and new internal controls designed based on the COSO framework and to be evaluated in accordance with SOX. In the following years these controls were improved and optimized. Recognizing the importance of these controls in safeguarding the integrity of Adtran Networks financial information, management established a dedicated team to evaluate internal controls over financial reporting in accordance with SOX. This team conducts evaluations to identify and help management mitigate potential risks over financial reporting, ultimately with the objective to ensure that internal controls over Adtran Networks consolidated financial statements are effective both by design and operationally.

In 2025 internal control structure evaluation process has identified several immaterial deficiencies in internal controls. These findings highlight specific areas for enhancement within Adtran Networks' internal control system. In response, corrective measures were formulated and implemented to address these deficiencies. The organization remains focused on strengthening the effectiveness of internal controls and reinforcing compliance with SOX requirements. Improvement efforts will continue into the subsequent financial year, aiming to rectify the identified deficiencies and improve financial reporting24 .

Risk assessment

As part of the internal controls related to financial reporting, the risk assessment follows the process described in the "risk management system" section.

Control activities

At an individual entity level, Adtran Networks' larger and more complex business units use an integrated enterprise resource planning solution, which also serves as general ledger system. Information technology controls have been implemented to restrict user access, ensure proper authorization of changes to the system and efficient handling of user help desk requests. Specific processes are defined and applied for the following reporting cycles in these business units: cash reporting, revenue recognition, accounts payable, capitalization of development expenses and recognition of subsidies for research, inventory reporting, fixed assets, payroll and provisions. Adtran Networks carries out monthly analytical reviews and quarterly balance sheet reviews based on a four-eye principle between the local accounting and the consolidation functions.

For the consolidated financial statements, the balance sheet and income statement positions requiring a significant degree of judgment and estimation when being valued are determined and analyzed with the involvement of management. This is the case for impairment testing reviews (annual or when a triggering event occurs), capitalization of development projects (when the industrialization stage is reached) and tax reporting, specifically deferred taxes (quarterly). Adtran Networks additionally carries out monthly intercompany reconciliations as part of the consolidation process and analytical reviews of actual vs. expected results based on a four-eyes principle between the financial planning and the consolidation functions.

All business units follow a set of global accounting policies and reporting guidelines applying to the whole group. The financial statements preparation process is monitored globally via a calendar that is communicated to all involved parties on a monthly basis. Checklists are completed both in the individual business units and at the consolidation level to ensure completeness of all closing steps. Periodic reviews by group management are conducted to detect errors and omissions.

24 Unaudited information

Information and communication tools

The internal control system at Adtran Networks is supported by tools to store and exchange information, enabling the management board to make informed business decisions about financial reports and disclosures. The following components ensure proper information and communication for financial reporting:

• Accounting systems for individual entities are matched to the degree of complexity of the business unit. For most entities, an integrated enterprise resource planning system, which also serves as general ledger system, is in place. All local accounts are mapped to the group chart of accounts, which is used group-wide.
• The group consolidation is supported by a database tool which is linked to the enterprise resource planning and financial planning systems via interfaces. The global financial planning system is used extensively in analyzing actual vs. expected results and thus monitoring the results of the consolidation.
• Global accounting policies for the more complex financial statement positions of the group and a group chart of accounts for all other positions are available. Accounting policies are updated regularly and are implemented only after a thorough internal review and training.

Internal monitoring

As part of the ongoing monitoring, the chief financial officer is informed about all material misstatements and control breakdowns at group and business unit level on a quarterly basis in the executive summary to the financial statements. The reporting of deficiencies follows the principles of open and transparent communication. Follow-up is ensured through regular meetings where corrective actions are presented.

Internal financial audit

Adtran Networks maintains an internal audit function to regularly assess financial processes and systems.

Based on an annual risk assessment, the internal audit function develops an audit plan proposal for the upcoming year. The proposed plan is presented to, aligned with, and finally ratified by the audit committee. The internal audit function performs internal audit reviews throughout the year according to the audit plan. Audit results are discussed with responsible managers. In case of identified process or system weaknesses, the internal audit function makes recommendations and improvement actions are defined and agreed with the responsible manager(s). The progress of these and their success in removing the identified weaknesses is reviewed by the internal audit function. The internal auditing activities are reported quarterly to the audit committee and includes feedback about the progress of audits performed versus the audit plan, about the results of terminated audit reviews and about improvements resulting from actions taken.

Outlook

The statements in this chapter apply to the Adtran Networks group as well as to Adtran Networks SE. Further details on the projected market environment, as well as the resulting opportunities, can be found in the "General economic and market conditions" section and in the "Business overview" section.

2025 marked a year with two different halves. In the first half of the year, revenues continued at 2024 levels still being under pressure by low demand as result of high customer inventories built up during the supply crisis. In the second half of the year revenues showed a significant uplift which had been estimated in the 2025 plan one or two quarters earlier in the year. The recovery was particularly strong in Optical Networking which had suffered most from the low demand after the semiconductor and supply chain crisis. Also a new large customer win contributed to the increase in revenues in this area.

Revenues increased from EUR 438.1 million to EUR 481.7 million in the Adtran Networks group. This 10.0 % increase had a positive impact on the company's profitability and resulted in a pro forma EBIT margin of negative 0.9% after negative 2.3 % reported in 2024. In the Annual Financial Report 2024, Adtran Networks forecasted for 2025 a revenue growth in the range of a high single- to low double-digit percentage as well as an improvement of pro forma EBIT margin to a positive single-digit percentage value.

The pro forma gross margin declined from 36.0% in 2024 to 34.3 % in 2025. The 2024 gross margin was positively impacted by the one-off sale of perpetual software licenses to a Tier-1 customer. Pro forma operational expenses increased slightly from EUR 167.9 million to EUR 169.6 million and the pro forma EBIT resulted in a negative EUR 4.4 million improved compared to negative EUR 10.2 million in 2024.

Net cash for Adtran Networks group at the end of fiscal year 2025 was EUR 37.8 million, compared to a net debt of EUR 6.6 million in the previous year fully in line with the forecast of the 2024 Annual Financial Report which assumed the net debt to be converted into a net cash position. This significant improvement is primarily due to a EUR 19.2 million higher operational cash flow and lower investment outflows of EUR 18.9 million compared to 2024.

Looking ahead to the business development in 2026, the management board expects an improvement in general demand across all product areas. While the tense political climate, the new US administration's tariff policy, and the comparatively high interest rate level continue to cause uncertainty in the market, it is imperative that progress is made in expanding the communications infrastructure and securing critical infrastructure. Furthermore, new technologies and business models, such as the use of generative AI, are generating additional bandwidth requirements in data networks that can only be met through further investments in network expansion.

In recent years, Adtran Networks has increasingly focused and comprehensively prepared itself technologically for the transformation of networks with the aspects of AI, cloud, mobility, automation and security. In addition to the high-quality performance features of optical data transmission, precise network synchronization technology and programmable cloud access solutions, the service portfolio also delivers increasing added value. Adtran Networks develops, produces and delivers communication technology for the digital future. According to estimates by industry analysts, the total addressable market for the company was USD 11.3 billion25 in 2025 and is projected to reach USD 12.6 billion by 2029.

Against the backdrop of the aforementioned factors and taking into account the planning parameters, personnel, and exchange rates, the management board expects a revenue growth from a negative single-digit percentage to a positive single-digit percentage for 2026 for the Adtran Networks group. In line with the development of revenues, the management assumes that pro forma EBIT margin will end up between a negative single-digit percentage and a positive single-digit percentage in 2026. The company's objective is to be in compliance with the defined capital management objectives, which are described in Note (35) to the consolidated financial statements.

Actual results may differ significantly from expectations if risks materialize or if planning assumptions prove unrealistic. The group's material risks are explained in the "risk and opportunity report" section.

25 World market excluding China for Metro and long haul WDM (CignalAI, "Transport Hardware & Markets Report", published December 2025), Ethernet access solutions and network synchronization (Adtran Networks own estimates)

Declaration on corporate governance

Compliance with the rules of proper corporate governance is of great importance to Adtran Networks - it is the foundation for the group's success. According to section 289f and § 315d of the German Commercial Code (Handelsgesetzbuch, HGB) in connection with Principle 23 of the German Corporate Governance Code in the version dated April 28, 2022 – published in the Federal Gazette on June 27, 2022 –, Adtran Networks SE is obliged to publish a "declaration on corporate governance". Adtran Networks publishes the declaration on corporate governance on the corporate governance page of its website www.adtrannetworks.com (https://www.adtran-networks.com/en/about-us/investors/corporate-governance). The remuneration report for the 2025 financial year and the auditor's report in accordance with Section 162 AktG, the applicable remuneration system in accordance with Section 87a (1) and (2) sentence 1 AktG and the most recent remuneration resolution in accordance with Section 113 (3) AktG are also publicly available there.

Meiningen, March 26, 2026

Thomas R. Stanton

Christoph Glingener Timothy Santo

Disclaimer: Potential inconsistencies in the table values are based on rounding differences.

Consolidated statements of financial position as of December 31, 2025

(in thousands of EUR)	Note	Dec. 31, 2025	Dec. 31, 2024
Current assets
Cash and cash equivalents	(8)	43,634	27,040
Trade accounts receivable	(9)	112,755	108,575
Thereof receivables from Adtran Holdings, Inc. and its subsidiaries	(41)	11,012	7,162
Receivables from Adtran Holdings, Inc. due to loss absorption	(41)	23,783	47,103
Contract assets	(11)	162	211
Inventories	(10)	84,042	91,142
Income tax receivable	(27)	2,607	3,436
Other current assets	(12)	56,903	85,353
Total current assets		323,886	362,861
Non-current assets
Right-of-use assets	(13)	23,862	25,525
Property, plant and equipment	(13)	33,474	35,388
Goodwill	(13)	45,328	50,206
Capitalized development projects	(13)	94,936	100,608
Intangible assets acquired in business combinations	(13)	2,408	4,135
Other purchased and internally generated intangible assets	(13)	52,963	38,036
Loans granted	(14)	15,352	16,429
Deferred tax asset	(27)	13,046	19,695
Other non-current assets	(12)	11,529	17,120
Total non-current assets		292,898	307,142
Total assets		616,784	670,003

(in thousands of EUR)	Note	Dec. 31, 2025	Dec. 31, 2024
Equity and liabilities
Current liabilities
Current lease liabilities	(15)	5,557	6,047
Current liabilities to banks	(16)	18,451	21,503
Trade accounts payable	(17)	45,184	48,578
Thereof payables to Adtran Holdings, Inc. and its subsidiaries	(41)	3,338	870
Current provisions	(19)	10,852	14,451
Income tax liability	(27)	3,891	2,965
Current contract liabilities and advance payments	(20)	37,472	25,727
Refund liabilities	(20)	279	364
Other current liabilities	(17)	39,049	44,511
Total current liabilities		160,734	164,146
Non-current liabilities
Non-current lease liabilities	(15)	20,968	22,753
Non-current liabilities to bank	(16)	—	46,917
Provisions for pensions and similar employee benefits	(18)	4,920	6,169
Other non-current provisions	(19)	1,863	1,146
Deferred tax liabilities	(27)	11,012	12,060
Non-current contract liabilities	(20)	16,059	13,220
Other non-current liabilities	(17)	13,235	15,425
Total non-current liabilities		68,057	117,690
Total liabilities		228,791	281,837
Stockholders' equity entitled to the owners of the parent company	(21)
Share capital		52,055	52,055
Capital reserve		338,142	337,158
Accumulated profit		25,187	57,879
Net loss		(21,883)	(62,701)
Accumulated other comprehensive income		(5,508)	3,775
Total stockholders' equity		387,993	388,166
Total equity and liabilities		616,784	670,003

Consolidated income statements for the financial year January 1 to December 31, 2025

(in thousands of EUR, except earnings per share and number of shares)	Note	2025	2024
Revenues	(22)	481,747	438,085
Cost of goods sold		(317,198)	(282,258)
Gross profit		164,550	155,828
Selling and marketing expenses	(23)	(59,488)	(59,569)
Thereof net impairment / write-up results on trade accounts receivable and contractassets	(9)	(376)	71
General and administrative expenses	(23)	(32,289)	(31,912)
Research and development expenses	(23)	(109,822)	(108,033)
Other operating income	(24)	26,767	19,688
Other operating expenses	(24)	(871)	(18,613)
Operating income (loss)		(11,153)	(42,612)
Interest income	(25)	2,094	2,118
Interest expenses	(25)	(4,455)	(5,106)
Foreign currency exchange gains	(26)	14,452	12,708
Foreign currency exchange losses	(26)	(14,045)	(13,986)
Income (loss) before tax		(13,107)	(46,878)
Income tax benefit (expense), net	(27)	(8,776)	(15,824)
Net income/(loss) entitled to the owners of the parent company		(21,883)	(62,701)
Earnings per share in EUR	(31)
basic		(0.42)	(1.20)
diluted		(0.42)	(1.20)
Weighted average number of shares for calculation of earnings per share
basic		52,054,500	52,054,500
diluted		52,054,500	52,054,500

Consolidated statements of comprehensive income

(in thousands of EUR)	Notes	2025	2024
Net income/(loss) entitled to the owners of the parent company		(21,883)	(62,701)
Items that may be reclassified to profit or loss in future periods
Exchange differences on translation of foreign operations		(11,580)	6,021
Items that will not get reclassified to profit or loss in future periods
Remeasurement of defined benefit plans	(18)	2,297	(392)
Total other comprehensive income/(loss)		(9,283)	5,629
Comprehensive income/(loss) entitled to the owners of the parent company	(21)	(31,166)	(57,073)

Consolidated cash flow statements

(in thousands of EUR)	Notes	2025	2024
Cash flow from operating activities
Income (loss) before tax		(13,107)	(46,878)
Adjustments to reconcile income before tax to net cash provided by operating activities
Non-cash adjustments
Amortization of non-current assets	(13)	73,018	83,698
Loss from disposal of property, plant and equipment and intangible assets	(13)	198	214
Stock compensation expenses	(39)	984	2,160
Other non-cash income and expenses *)		1,766	(2,304)
Net financing expenses *)		2,212	3,837
Foreign currency exchange differences		(7,714)	1,632
Changes in asset and liabilities
Decrease (increase) in trade accounts receivable		(4,131)	3,281
Decrease (increase) in inventories		7,100	15,131
Decrease (increase) in other assets		32,223	9,631
Increase (decrease) in trade accounts payable		(5,861)	5,966
Increase (decrease) in provisions		(3,861)	(4,711)
Increase (decrease) in other liabilities *)		1,169	(4,001)
Income tax paid and refunded		(1,718)	(4,611)
Net cash provided by operating activities		82,278	63,045

*) The presentation of financing expenses in operating cash flow has been changed in 2025. Prior year information has been adjusted accordingly.

(in thousands of EUR)	Notes	2025	2024
Cash flow from investing activities
Proceeds from government grants		626	125
Investments in property plant and equipment	(13)	(11,527)	(10,691)
Investments in intangible assets	(13)	(54,696)	(51,804)
Decrease (increase) in the balance from the purchase of receivables from Adtran, Inc.		1,818	(5,296)
Investments in loans granted	(14)	—	(15,272)
Interest received		1,318	1,561
Net cash used in investing activities		(62,461)	(81,377)
Cash flow from financing activities
Proceeds from capital increase and exercise of stock options	(21)	—	—
Repayment of lease liabilities		(5,976)	(5,551)
Increase in financial liabilities to Adtran Holdings, Inc.		—	—
Cash repayment of financial liabilities to Adtran Holdings, Inc.		—	(53,034)
Proceeds from liabilities to banks	(16)	—	69,176
Cash repayment of liabilities to bank	(16)	(42,368)	(25,012)
Increase (decrease) in financial liabilities from factoring agreements	(16)	(3,052)	8,217
Cash inflow from loss assumption by Adtran Holdings, Inc.		53,329	24,566
Interest paid		(4,446)	(5,806)
Net cash provided by/(used in) financing activities		(2,513)	12,556
Net effect of foreign currency translation on cash and cash equivalents		(710)	2,262
Net change in cash and cash equivalents		16,594	(3,514)
Cash and cash equivalents on January 1		27,040	30,554
Cash and cash equivalents on December 31		43,634	27,040

Details on the preparation of the consolidated cash flow statement are included in note (30).

Consolidated statement of changes in stockholders' equity

Share capital

(in thousands of EUR, except number of shares)	Number ofshares	Par value	Capital reserve	Accumulated income/deficitincluding net income (loss)	Accumulated othercomprehensive income (loss)	Total stockholders equity entitled to theowners of the parent company
Balance on January 1, 2024	52,054,500	52,055	335,352	10,144	(1,853)	395,698
Capital increase, including exercise of stock options	—	—	—	—	—	—
Stock options outstanding	—	—	1,806	—	—	1,806
Loss absorption by Adtran Holdings, Inc.	—	—	—	47,735	—	47,735
Adjusted net loss	—	—	—	(62,701)	—	(62,701)
Exchange differences on translation of foreign operations	—	—	—	—	6,021	6,021
Remeasurement of defined plans	—	—	—	—	(392)	(392)
Adjusted comprehensive income	—	—	—	(62,701)	5,629	(57,073)
Balance on December 31, 2024	52,054,500	52,055	337,158	(4,822)	3,776	388,166
Balance on January 1, 2025	52,054,500	52,055	337,158	(4,822)	3,776	388,166
Capital increase, including exercise of stock options	—	—	—	—	—	—
Stock options outstanding	—	—	984	—	—	984
Loss absorption by Adtran Holdings, Inc.	—	—	—	30,009	—	30,009
Net loss	—	—	—	(21,883)	—	(21,883)
Exchange differences on translation of foreign operations	—	—	—	—	(11,580)	(11,580)

Exchange differences on translation of foreign operations	—	—	—	—	(11,580)	(11,580)
Remeasurement of defined plans	—	—	—	—	2,297	2,297
Comprehensive income	—	—	—	(21,883)	(9,283)	(31,166)
Balance on December 31, 2025	52,054,500	52,055	338,142	3,304	(5,508)	387,993

Details on changes in stockholders' equity are presented in note (21).

Notes to the consolidated financial statements

General information

(1) Information about the company and the group

Adtran Networks SE (hereinafter also referred to as the "company" or "Adtran Networks SE") is a Societas Europaea domiciled in Meiningen, Germany, with its registered office at Märzenquelle 1–3, 98617 Meiningen, and is registered as HRB 508155 at the commercial register in Jena. The management board authorized the consolidated financial statements for the year ended December 31, 2025, for issuance on March 26, 2026.

The Adtran Networks group (hereinafter also referred to as "Adtran Networks", "the group") develops, manufactures and sells optical and Ethernet1 -based networking solutions to telecommunications carriers2 and enterprises to deliver data, storage, voice and video services.

Telecommunications service providers, private companies, universities and government agencies worldwide use the group's systems. Adtran Networks sells its product portfolio both directly and through an international network of distribution partners.

Significant accounting policies

(2) Basic principles for the preparation of the consolidated annual financial statements

The group's consolidated annual financial statements for the financial years ended December 31, 2025, and December 31, 2024, are prepared in accordance with the International Financial Reporting Standards (IFRS) published by the International Accounting Standards Board (IASB), as applicable in the European Union (EU) in consideration of interpretations of the Financial Reporting Interpretations Committee (IFRIC) and the applicable additional German statutory regulations according to § 315e Abs. 1 HGB. The consolidated financial statements have been prepared on a historical cost basis, except for the fair value measurement through profit or loss of certain financial instruments and share-based payments.

The financial year correlates with the calendar year. The consolidated annual financial statements are presented in euro. Unless otherwise stated, all amounts quoted are in thousands of euros. The balance sheet is separated into current and non-current assets and liabilities. The classification of income and expenses in the income statement is based on their function within the entity. When items on the balance sheet and in the income statement are summarized in the interest of clarity, this is explained in the notes to the consolidated financial statements.Due to rounding, figures in tables may not add up exactly to the totals shown and percentages shown may not exactly reflect the absolute figures to which they relate.

The annual financial statements of the individual subsidiaries of the holding company Adtran Networks SE, as subsumed in the consolidated annual financial statements, are all prepared using the same accounting and valuation policies and the same balance sheet date.

Adtran Networks SE, which as the parent company prepares the consolidated financial statements in accordance with IFRS, is controlled by Adtran Holdings, Inc., Huntsville, Alabama, USA, as the direct parent company. The consolidated financial statements in accordance with US GAAP of the parent company Adtran Holdings, Inc. can be accessed on the homepage https://investors.adtran.com/financials/annual-reports/default.aspx. Further information can be found in note (40).

The consolidated financial statements were prepared on the going concern assumption.

1 Ethernet is a packet-based data transmission protocol with a data rate of 10Mbit/s. Fast Ethernet provides a data rate of 100Mbit/s, Gigabit Ethernet 1Gbit/s and 10 Gigabit Ethernet 10Gbit/s. Today also 40, 100 and 400 Gigabit Ethernet solutions are commercially available with data rates of 40Gbit/s, 100Gbit/s and 400Gbit/s, respectively.

2 Carriers, in general, are companies that build and maintain communications networks for commercial use. Beyond incumbent telephony companies, these also include new alternative carriers, which were established during the deregulation of the telecommunications market, and special service providers, which offer outsourced services (e.g., software applications or data storage) for enterprise customers.

(3) Effects of new standards and interpretations

The accounting policies followed are consistent with these of the prior financial year, except for the adoption of new and amended IFRSs and interpretations (IFRICs) during the year.

Standards, amendments and interpretations applicable for the first time in 2025

In 2025, following standards and interpretations have been adopted for the first time.

Standard	Topic	First-timeadoption*	Expected impact on the financialposition and performance
Amendments to IAS 21	Lack of exchangeability - New disclosures onthe usage of estimated exchange rate	Jan. 1, 2025	not applicable

* To be applied in the first reporting period of a financial year beginning on or after this date.

New accounting requirements not yet applicable for first-time adoption in 2025

The IASB and the IFRIC have issued further Standards and Interpretations in 2025 and previous years that were not applicable for the financial year 2025. In addition, the first-time adoption is partly still subject to endorsement by the EU. Adtran Networks does not consider early adoption.

Standard	Topic	First-timeadoption*	Expected impact on the financialposition and performance
Amendments to IFRS 9 andIFRS 7	Classification and Measurement of FinancialInstruments	Jan. 1, 2026	no material impact expected
Amendments to IFRS 9 andIFRS 7	Contracts Referencing Nature-dependentElectricity	Jan. 1, 2026	not applicable
Annual Improvements to IFRS –Volume 11	Annual Improvements to IFRS – Volume 11	Jan. 1, 2026	no material impact expected
IFRS 18	Presentation and disclosure in the financialsstatements	Jan. 1, 2027	under review
IFRS 19	Subsidiaries without Public Accountability:Disclosures	Jan. 1, 2027	not applicable
Amendments to IAS 21	The effects of changes in foreign exchangerates: Translation to a hyperinflationarypresentation currency	Jan. 1, 2027	not applicable
Amendments to IFRS 10 andIAS 28	IIFSale or Contribution of Assets between anFRInvestor and its Associate or Joint VentureRSS	IFnot definedRS	not applicable

* To be applied in the first reporting period of a financial year beginning on or after this date.

IFRS 18 presentation and disclosure in the financial statements is effective for annual periods beginning on or after January 1, 2027 and will replace IAS 1 presentation of financial statements. The new standard contains the following significant new requirements:

• Entities will be required to classify income and expenses in the income statement in five categories: operating, investing c, financing, income tax and discontinued operations. Companies will also be required to present a newly defined subtotal "operating profit".
• Certain company-specific performance measures (so-called "management-defined performance measures", "MPMs") will be disclosed in a separate note in the financial statements.
• Improved guidelines for grouping information within the financial statements will be introduced. In addition, all companies will be required to use operating profit as the starting point for the cash flow statement when presenting cash flows from operating activities using the indirect method.

Adtran Networks currently evaluates the potential impact of the new standard, particularly with regard to the structure of the consolidated income statement, the cash flow statement and the additional disclosure requirements for MPMs. The group is also reviewing the impact on the way information is grouped in the financial statements, including items currently referred to as "Other."

(4) Recognition and measurement

Inventories

Inventories are valued at the lower of cost or net realizable value. The cost of purchase is determined by the average method. Production costs include direct unit costs, an appropriate portion of necessary manufacturing overheads and production-related depreciation that can be directly assigned to the production process. Administrative and social insurance charges that can be assigned to production are also considered. Financing charges are not classified as part of the at-cost base. The net realizable value is the estimated selling price that could be realized on the closing date in the context of ordinary business activity, less estimated costs of completion and costs necessary to make the sale.

Inventory depreciation covers risks relating to slow-moving items or technical obsolescence based on applicable net realizable value test. Where the reasons for previous write-downs no longer apply, these write-downs are reversed.

Property, plant and equipment

Property, plant and equipment is stated at historic cost less accumulated depreciation and accumulated impairment losses, if any. The present value of the expected cost for the decommissioning of the asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.

Subsequent costs are included in the asset's carrying amount or recognized as separate asset only when it is probable that future economic benefits associated with this item will flow to the group and the cost can be measured reliably. All other repairs and maintenance costs are charged to the income statement during the financial period in which they are incurred.

Depreciation on property, plant and equipment is calculated on a straight-line basis over the estimated useful lives of the assets as follows:

•	Buildings	20 to 39 years
•	Technical equipment and machinery	3 to 10 years
•	Factory and office equipment	3 to 10 years

No regular depreciation applies for land.

Leasehold improvements are capitalized and depreciated over the expected useful life on a straight-line basis.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognized.

The assets' residual values, useful economic lives and methods of depreciation are reviewed at each financial year-end and adjusted prospectively, if appropriate.

Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value on the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. Internally generated intangible assets, excluding capitalized development costs for the development of technologies included in products to be sold as well as expenses for capitalizable license costs and internal expenses for the creation of production masks, are not capitalized, and expenditure is reflected in profit or loss in the year in which the expenditure is incurred.

The useful economic lives of intangible assets are assessed to be either finite or indefinite.

Intangible assets with finite lives are amortized on a straight-line basis over the expected useful lives of the assets as follows:

•	Capitalized development projects	3 to 5 years
•	Intangible assets acquired in business combinations	3 to 10 years
•	Other purchased and internally generated intangible assets	3 to 10 years

The carrying amounts of the group's intangible assets with finite useful lives are reviewed at each reporting date to determine whether there is any indication of impairment. If this is the case, the recoverable amount of the asset is estimated. The amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at each financial yearend. The amortization expense on intangible assets with finite lives is recognized in profit or loss in the expense category consistent with the function of the intangible asset.

Intangible assets with an indefinite useful life are not amortized. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. The useful life of an intangible asset with an indefinite life is reviewed at least annually to determine whether the indefinite life assessment continues to be applicable. If not, the change in the useful life assessment from indefinite to finite is made on a prospective basis. Apart from goodwill and development projects in progress all intangible assets are amortized over their useful lives.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between their disposal proceeds and the selling price of the asset, and they are recognized in the income statement when the asset is derecognized.

Goodwill

An indefinite useful life is assumed for goodwill acquired in the context of business combinations. Impairment reviews are performed at the cash generating unit level annually or when there is an indication that the goodwill may be impaired in accordance with IAS 36. Impairment losses on goodwill recognized in prior periods are not reversed. See note (13).

Intangible assets acquired in business combinations

Intangible assets acquired in business combinations have a finite useful life. They are recognized at fair value at the acquisition date and amortized on a straight-line basis over estimated useful economic lives. They are tested for impairment if an indication exists that the recoverable amount of the asset may have decreased.

The breakdown of intangible assets into individual items is included in note (13).

Capitalized development projects

Development expenses are only capitalized if the development costs can be reliably measured, the project or process is technically and commercially suitable, a future economic benefit is probable and Adtran Networks both intends and has sufficient resources to complete the development and use or sell the asset. Other development expenses are recognized in profit or loss as soon as they are incurred.

Capitalized development projects include all costs that can be directly assigned to the development process. Financing charges are capitalized if the development project represents a qualifying asset in the sense of IAS 23.

After initial recognition of a development project as an asset, measurement is at historical cost, less accumulated amortization and impairment. Depreciation is recognized on a straight-line basis from the start of use in sellable products over the estimated sales periods of the products (generally between three and five years). Ongoing development projects are tested annually for impairment on level of the smallest cash generating unit or when there is an indication of potential impairment. Completed development projects are tested for impairment if there is an indication of potential impairment. Impairment losses are recognized if appropriate.

Research costs are expensed as incurred according to IAS 38.

Impairment of non-financial assets

Intangible assets with indefinite useful economic lives are tested for impairment annually and whenever there is an indication for potential impairment, either individually or at the cash generating unit level. Intangible assets with finite and useful economic lives are tested for impairment whenever there is an indication for potential impairment. Intangible assets are tested either individually or at the cash generating unit level. The impairment test was performed as of September 30, 2025.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined.

An impairment loss is only recognized if the carrying amount of the asset or respective cash generating unit exceeds its recoverable amount. The recoverable amount is the higher of the fair value less costs of disposal and value in use of the respective asset or cash generating unit. Prior impairments of non-financial assets (other than goodwill) are reviewed for possible reversal at each reporting date.

Government grants

Adtran Networks recognizes government grants for fixed assets as well as for grants related to research projects.

Government grants are recognized where there is reasonable assurance that the grant will be received, and all attached conditions will be met. They are recognized at the amount deemed sufficiently probable. Grants that compensate Adtran Networks for expenses incurred are recognized as other income in profit or loss in the periods in which the expenses are recognized, unless the grant conditions are not met until after the related expenses have been recognized. In this case, the grant is recognized in the period in which the entitlement arises. Where the grant relates to fixed assets, it is recognized as a reduction of purchase or production costs and released as a reduction of depreciation expense over the expected useful life of the related asset.

Grants related to research projects are recognized as other assets if the grant is approved and certified but the payment still outstanding. A respective liability is recorded in the amount of the grant which has been approved at initial recognition and is reversed proportionately in the amount of the expenses incurred for the project purpose in the period in which they were incurred until the defined research tasks are completed. In the cash flow statement, grants related to expenses are reported under cash flow from operating activities. The reduction in acquisition costs from grants for capitalized development projects is shown in cash flow from investing activities.

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period to get ready for its intended use or sale (qualifying asset) are capitalized as part of the cost of the respective assets. If borrowing costs cannot be directly attributed to the acquisition, construction or production of an asset, an assessment is made on whether general borrowing costs should be recognized that would have been avoided if the asset was not acquired, constructed or produced. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Leasing

The group leases various properties and cars. Rental contracts are typically made for fixed periods of 3 to 5 years but may have extension options as described below. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. At the inception of the contract, the group assesses whether the agreement constitutes or contains a lease. This is the case if the contract grants the right to control the use of an identified asset in exchange for payment over a specified period. The lease agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes.

Leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated until the end of the leasing period on a straight-line basis. If a purchase option is considered reasonably certain, the amortization period corresponds to the useful life.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

• fixed payments (including in-substance fixed payments), less any lease incentives receivable
• variable lease payment that are based on an index or a rate
• amounts expected to be payable by the lessee under residual value guarantees
• the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
• payments of penalties for early termination of the lease if the exercise of a termination option is considered reasonably certain.

The lease payments are discounted using the interest rate implicit in the lease, if that rate can be determined, or the group's incremental borrowing rate. This is basically the interest rate that the respective lessee would have to pay in order to raise the necessary borrowed capital to acquire an asset in a similar economic environment with a similar term and security or similar conditions that offers him a comparable right of use.

At commencement date, right-of-use assets are measured at cost comprising the following:

• the amount of the initial measurement of lease liability
• any lease payments made at or before the commencement date less any lease incentives received
• any initial direct costs, and
• restoration costs.

Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise ITequipment and small items of office furniture.

Extension and termination options are included in a number of property and equipment leases across the group. These terms are used to maximize operational flexibility in terms of managing contracts. The majority of extension and termination options held are exercisable only by the group and not by the respective lessor.

To optimize lease costs during the contract period, the group sometimes provides residual value guarantees in relation to car leases. The group initially estimates and recognizes amounts expected to be payable under residual value guarantees as part of the lease liability. The amounts are reviewed, and adjusted if appropriate, at the end of each reporting period.

Post-employment benefits

Adtran Networks maintains defined benefit plans in five countries based on the pensionable compensation of its employees and their length of service. Some of these pension plans are financed through external pension funds. Provisions for pensions are actuarial measured using the projected unit credit method for defined benefit pension plans, considering not only the pension obligations and vested pension rights known at the reporting date, but also expected future salary and benefit increases. The interest rate used to determine the present value of the obligations is generally set based on the yields on high-quality corporate bonds or government bonds in the respective currency area. The return on existing plan assets and expenses for interest added to obligations are reported in finance costs. Service cost is classified as operating expenses. Past service cost not recognized due to a change in the pension plan shall immediately be recognized in the period in which the change took effect. Gains and losses arising from adjustments and changes in actuarial assumptions are recognized immediately and in full in the period in which they occur within other comprehensive income. Further details on recognition and measurement of employee benefits are included in note (18).

In addition, Adtran Networks grants defined contribution plans to employees of some group entities in accordance with statutory or contractual requirements. The payments are made to state or private pension insurance funds. Under defined contribution plans, the employer does not assume any other obligations beyond the payment of contributions to an external fund. The amount of the future pension payments will exclusively depend on the contribution made by the employer (and their employees, if applicable) to the external fund, including income from the investment of such contributions. The amounts payable are expensed when the obligation to pay the amounts is established and classified as operating expenses.

Share-based compensation transactions

As compensation for the work performed, the parent company Adtran Holdings, Inc., Huntsville, Alabama, USA, grants employees of Adtran Networks (including senior executives) share-based payments in the form of equity instruments (equitysettled share-based payments), restricted stock units (RSUs) and performance stock units (PSUs). A recharge agreement was agreed with the parent company in the amount of the actual expenses incurred, which is recorded as personnel expenses and a liability.

Share-based payment arrangements settled through equity instruments of the parent company

From Adtran Networks SE's perspective, all existing share-based payment plans constitute equity-settled share-based payment arrangements. Since Adtran Holdings, Inc., not Adtran Networks SE, has the obligation to deliver shares in Adtran Holdings, Inc. to the beneficiaries, this results in personnel expenses on the one hand, and an increase in the capital reserve on the other.

An agreement was reached with Adtran Holdings, Inc. to pass on the actual expenses incurred. From Adtran Networks SE's perspective, this represents a financial liability, which is recognized directly in equity on an accrual basis due to the shareholder relationship.

Provisions

Provisions are recognized when the group has a present obligation (legal or constructive) as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision represents the best estimate of the expenditure required to settle the present obligation.

If the group expects at least a partial reimbursement for an item for which a provision has been recognized, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense related to any provision is presented in profit or loss, net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision over time is recognized in other financial gains and losses, net.

Share capital

Common stock is disclosed in stockholder's equity.

Incremental costs directly attributable to the issuance of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Financial instruments

Financial instruments are contracts that give rise to a financial asset in one entity and a financial liability or equity instrument in another entity. Adtran Networks recognizes financial assets and financial liabilities in the balance sheet when a company in the group becomes a contractual party to the financial instrument.

All customary purchases and sales of financial assets are recognized on the trading date, i.e. the date on which Adtran Networks enters into the obligation to purchase the asset.

Financial assets and financial liabilities are generally reported at gross value. Netting only applies if the offsetting of the amounts is legally enforceable and it is intended to actually offset them. In general, Adtran Networks does not intend to offset any amounts.

Financial assets

Adtran Networks financial assets include, in addition to trade receivables, cash and cash equivalents, other receivables, other investments and derivative financial instruments.

Classification

Financial assets are initially allocated to one of the following measurement categories in accordance with IFRS 9:

• 1. measured at amortized cost
• 1. measured at fair value through profit or loss
• 1. measured at fair value through other comprehensive income (debt instruments)
• 1. measured at fair value through other comprehensive income (equity instruments)

Financial assets that are debt instruments according to IAS 32 are classified based on the business model for managing the financial assets and the contractually agreed cash flows. Debt instruments are classified as amortized cost if the business model "hold to collect" applies and contractual cash flows solely consist of principal and interest on the outstanding redemption. If the business model is based on the collection of contractual cash flows as well as on the sale of the financial assets and the cash flows only consist of principal and interest on the outstanding principal amount, the financial assets are classified at fair value through other comprehensive income (FVOCI). Financial assets held for sale and derivative financial instruments that are not designated as hedges, and financial assets that do not consist solely of payments of principal and interest are classified as at fair value through profit or loss (FVTPL).

Debt instruments are reclassified if the business model for managing those assets changes.

For investments in equity instruments that are not held for trading or are a contingent consideration to be paid by the acquirer as part of a business combination in accordance with IFRS, an irrevocable option to account for the equity investments at fair value through comprehensive income (FVOCI) at the time of initial recognition is available. Adtran Networks has not made use of this option.

Adtran Networks classifies receivables that are not subject to factoring, cash and cash equivalents, and rent deposits as financial assets, which are carried at amortized cost. Trade receivables for which a factoring agreement is in place are classified as financial assets at fair value through profit or loss.

Receivables from loss compensation due to existing profit/loss transfer agreements are recognized in the amount of the loss under commercial law to be compensated for the past financial year. On January 16, 2023, a domination and profit and loss transfer agreement with Adtran Holdings, Inc. with an initial term until December 31, 2025 has been registered in the commercial register. The agreement is extended for two further financial years of Adtran Networks (each a "subsequent term") unless terminated in writing by either party six months prior to the expiry of the initial term or the relevant subsequent term.

The group has not made use of the option to classify financial assets at fair value through profit or loss upon initial recognition. Derivatives are initially recognized and subsequently measured at fair value through profit or loss.

Initial measurement

At initial recognition, the group measures a financial asset at its fair value. Trade receivables are initially measured at the transaction price in accordance with IFRS 15. In the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset are included in the fair value on initial recognition. Transaction costs of financial assets carried at fair value through profit or loss are expensed immediately.

Subsequent measurement

The subsequent measurement of Adtran Networks' financial assets is based on their classification:

• 1. at amortized cost: Interest income from these financial assets is reported in the financial income using the effective interest method. Currency gains or losses from the translation of financial assets are recognized in the financial result. Gains and losses on derecognition as well as impairment gains and losses are recorded in the income statement,
• 1. at fair value through profit or loss: Gains or losses on debt instruments, which are subsequently measured at fair value through profit or loss, are included in the income statement as other operating income or expenses in the period in which they arise. Gains and losses on derivatives are recognized in other financial income in the income statement.

The group subsequently measures all equity instruments at fair value. Changes in fair value are recognized in other gains (losses) in the income statement as applicable. The option for measurement in other comprehensive income (OCI) has not been applied.

Impairment

The group assesses expected future credit losses associated with its debt instruments measured at amortized cost based on future expectations. A respective risk provision is recognized.

Financial assets are considered to be in default and credit impaired if there is an objective evidence of impairment. This applies in case of bankruptcy, knowledge of impending insolvency proceedings or if financial assets are overdue more than one year.

Financial assets are written off if there is no reasonable expectation recovering the financial asset. This could be, inter alia, if debtor payments are delayed more than two years or if the debtor fails to commit to a repayment plan. In this case, the gross carrying amount of the financial asset is amortized or derecognized.

General approach

Generally, financial assets are considered as having a low default risk at initial recognition resulting in a 12-month expected credit loss provision. In case of a significant increase in credit risk, the lifetime expected credit losses are recognized. Amongst others debtor's payment delays of more than 30 days or the decrease of the rating are considered an indicator for increase in default risk.

Adtran Networks assesses expected credit losses using the general approach for cash and cash equivalents and material other financial assets, except for trade receivables. Further details are described in note (34) on financial risk management.

Simplified approach

For trade receivables and contract assets with no significant financing component the group applies the simplified approach, which requires lifetime expected credit losses to be recognized from initial recognition of the receivables.

In order to measure expected credit losses, trade receivables are summarized on the basis of common credit risk characteristics considering the region of business and overdue days. The expected credit losses are based on customers historical payment behavior for a period of three years as well as on historical defaults. These are reviewed once a year and adjusted to take current and future information on macroeconomic elements (e.g. geopolitical events, currency fluctuations, inflation, trade wars, state subsidies) into account, that have an influence on customers' ability to meet their financial obligations.

Contract assets relate to work in progress that has not been invoiced and bears essentially the same risk characteristics as trade receivables. The group has therefore concluded that the expected loss rates for trade receivables are a reasonable approximation of the loss ratios for contract assets.

Derecognition

Adtran Networks derecognizes financial assets (or parts of their financial assets where applicable) when the rights to receive cash flows from the financial asset have expired or have been transferred and the group substantially transferred all opportunities and risks associated with the ownership.

Financial liabilities

The financial liabilities of Adtran Networks include trade payables and other liabilities, bank overdrafts, loans and derivative financial instruments. The accounting treatment of lease liabilities is dealt with separately as presented in the section "Leasing".

Financial liabilities from the profit transfer due to existing profit/loss transfer agreements are reported in the amount of the profit in accordance with commercial law to be transferred for the past financial year. On January 16, 2023, a domination and profit and loss transfer agreement with Adtran Holdings, Inc. was entered in the commercial register with an initial term until December 31, 2025. The agreement is extended for two further financial years of Adtran Networks (each a "subsequent term") unless terminated in writing by either party six months prior to the expiry of the initial term or the relevant subsequent term.

Classification

Financial liabilities are initially assigned to one of the following valuation categories in accordance with IFRS 9:

• 1. measured at amortized cost
• 1. measured at fair value through profit or loss.

The group has not used the option to designate financial liabilities as "at fair value through profit or loss" on initial recognition of financial liabilities.

Initial measurement

At initial recognition, the group measures a financial liability at its fair value less, in the case of a financial liability not at fair value through profit or loss, transactions costs that are directly attributable to the acquisition of the financial liability.

Subsequent measurement

With the exception of derivatives, financial liabilities are generally measured at amortized cost as part of subsequent measurement. In addition, other financial liabilities of Adtran Networks are recognized as follows, depending on their classification:

• 1. Financial liabilities measured at amortized cost: This category includes trade payables and interest-bearing loans. After initial recognition, these are measured at amortized cost using the effective interest method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as in case of amortization using the effective interest method. Amortization according to the effective interest method is included in interest expenses in the profit and loss account..
• 1. Financial liabilities at fair value through profit or loss: This category includes derivative financial instruments that are not designated as hedging instruments in accordance with IFRS 9 hedge accounting rules. Gains and losses are recognized in financial income in the income statement

Derecognition

A financial liability is derecognized when it is settled, meaning the obligations specified in the contract are fulfilled, canceled, or expire. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, this exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. In case of minor changes in conditions a change in the present value will be considered in profit or loss.

Derivative financial instruments and hedging activities

The group entered into forward rate agreements to hedge foreign currency exposure of expected future cash flows in foreign currency.

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in the fair value depend on whether the derivative is designated as a hedging instrument.

The group did not apply hedge accounting rules according to IFRS 9 during the years ended December 31, 2025 and 2024. Thus, changes in fair value of the derivatives are recognized in profit or loss immediately.

Contracts with customers

Revenue recognition

Revenue is recognized when a performance obligation is satisfied, i.e. when control of the goods or services is transferred to the customer. Control is passed either at a point in time or over time.

When hardware is sold control is transferred at a point in time depending on the delivery terms. Software licenses are either sold together with the hardware or sold separately. Control in case of software is transferred when the customer is able to use the software. In the case of software sold separately, revenue is recognized at the point of time.

In case of service level agreements3 or maintenance contracts as well as period-related software licenses revenue is recognized over a period of time.The customer receives and uses all services at the same time as they are provided by the company. The revenue recognition of Service Level Agreements and maintenance contracts is carried out linearly over the contract period (output-oriented method). This method is appropriate as services are provided at regular intervals and revenue is recognized based on the amount of subscription time.

Bill-and-hold arrangements or consignment stores are recognized when the performance obligation to transfer a product are met and the customer obtains control.

Transaction price

In general, the transaction price is the price from the order further considering the specific arrangements of the underlying contract. For contracts that contain multiple performance obligations, the transaction price is allocated to the individual performance obligations based on the relative individual selling price. The adjusted-market-assessment method is applied. A consideration to be paid to a customer is recorded as a reduction in the transaction price, hence reducing revenues, unless the payment relates to a specific delivery of goods by the customer or service provided by the customer.

The transaction price from a contract may contain fixed and/or variable components. Variable components are included from the Adtran Partner Program (APP). After meeting certain requirements, such as sales targets and certifications, qualified partners collect a Business Development Fund on a quarterly basis, which can be used as a discount or credit.

With regard to financial components, the practical remedy of not considering the effects of a financing component is applied if the maximum duration of the period between transfer of goods or services and payment by the customer does not exceed one year.

The group does not adjust any of the transaction prices for the time value of money.

Contract assets and liabilities

A contract asset is recognized when Adtran Networks has transferred the goods or services. The contract asset is recognized as a receivable if an unconditional payment entitlement of the company exists.

A contract liability is recognized if the company receives the consideration before it has delivered the goods or services. This applies in particular to advance payments for service level agreements and maintenance contracts.

Contract assets and liabilities related to one contract are netted and shown as either contract assets or contract liability.

In addition, certain customers have the benefit of customer loyalty programs which result in the recognition of a contract liability and reduction of revenues based on the relative individual selling price.

Volume rebates can be identified as incentive programs where the company makes a payment to the customer once a specified sales volume has been achieved with the customer. Volume rebates are not related to separate performance obligations but are considered as a variable component of the transaction price.

Customer rights of return are considered in the transaction price based on experience.

The company has made use of the option to recognize all costs in relation to conclude and extend a contract which would be amortized over a period of maximum one year upon activation, directly in profit and loss. This concerns all such costs.

3 Commitment between a service provider and a client. Aspects of the service such as quality and availability are agreed between the service provider and the service user.

Warranties

Exclusively all warranties are so-called "assurance type" warranties and therefore do not form separate performance obligations. For these essentially legal warranties, accruals according to IAS 37 are considered.

Cost of goods sold

The cost of goods sold comprises the costs incurred in the production and rendering of services. This item subsumes both the direct cost of materials and production directly assignable to a product and indirect (overhead) costs, including the depreciation of production equipment, amortization of production related intangible assets and write-downs on inventories. The cost of goods sold also includes appropriation to the warranty provision and amortization of purchased and self-developed technologies. Income from the reversal of write-downs on inventories reduces the cost of goods sold.

Interest income and expenses

For all financial instruments measured at amortized cost, interest income or expenses are recorded using the effective interest rate, which is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability.

Taxes

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are these that are enacted or substantively enacted on the respective balance sheet date.

Deferred income tax

Deferred tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

• where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
• in respect to taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the near future.

Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:

• where the deferred tax asset related to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
• in respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will not reverse in the foreseeable future and no taxable profit will be available against which the temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed on each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed on each balance sheet date and are recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted on the balance sheet date. Future changes in tax rates are recognized on the balance sheet date if their impact is materially certain as part of the tax legislation process.

According to IAS 12.74 deferred tax assets and liabilities have been set off insofar as offsetting qualifications apply.

The best estimate for any uncertain current and deferred income tax items to be recognized is the expected tax payment.

IFRIC 23 clarifies how the recognition and measurement requirements set out in IAS 12 should be applied when there is uncertainty about income tax treatments and includes current and deferred tax assets or liabilities. In accordance with IFRIC 23, uncertain tax treatments may be accounted for separately or together with one or more other uncertain tax treatments. The method that is better suited to predicting the resolution of the uncertainty must be selected. When making the assessment, it must be assumed that a tax authority will examine all amounts that it is authorized to examine and that it has all relevant information for the examination. If it is considered unlikely that the tax authority will accept an uncertain tax treatment, either the most likely amount or the expected value is to be applied to each uncertain tax treatment in order to take account of the effect of the uncertainty, depending on which method is more suitable for predicting the resolution of the uncertainty.

The group companies are subject to income tax in a large number of countries worldwide. When assessing global income tax assets and liabilities, the interpretation of tax regulations in particular can be subject to uncertainty. A different view of the respective tax authorities regarding the correct interpretation of tax standards cannot be ruled out. Changes in assumptions regarding the correct interpretation of tax standards, for example due to changes in case law, are reflected in the recognition of uncertain income tax assets and liabilities in the corresponding financial year.

The group falls under the scope of the OECD "Pillar Two" regulations. The Pillar Two legislation was enacted in Germany and has been in effect since January 1, 2024. The group has applied a temporary mandatory relief from deferred tax accounting for the impact of the top-up tax and accounts for it as a current tax when it incurred.

Earnings per share

The group calculates basic and diluted earnings per share in accordance with IAS 33. Basic earnings per share are calculated based on the weighted average number of no-par value shares outstanding during the reporting period. Diluted earnings per share are calculated based on the weighted average number of no-par value shares outstanding during the reporting period, but also including the number of no-par value shares that could come into existence if all stock options that are in the money were exercised on the balance sheet date.

(5) Significant accounting judgments, estimates and assumptions

The preparation of the group's financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities on the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future. Assumptions used to make estimates are regularly reviewed. Changes in estimates only affecting one accounting period are only considered in that accounting period. In the case of changes in estimates that affect the current and future accounting periods, these are considered appropriately in the current and subsequent accounting periods.

The assessment of the impact of non-financial risks (global warming, circular economy, new regulations) on the recognition and measurement of assets and liabilities is based on significant management judgments and assumptions. Non-financial risks are assessed by management as long-term risks that currently have no significant impact on net realizable values, recoverable amounts, useful lives or the requirement to recognize provisions.

Assumptions and estimation uncertainties

Information on assumptions and estimation uncertainties as at the reporting date, which may give rise to a significant risk that a material adjustment to the carrying amounts of recognized assets and liabilities will be required within the next financial year, is included in the notes below:

Valuation of inventories

Inventories are valued at the lower of cost or net realizable value. Inventory depreciation covers amongst others risks relating to slow-moving items. Consideration of these risks in the inventory depreciation is subject to estimates that have a significant effect on the carrying amount of inventories. See note (10) for the carrying amounts involved.

Impairment of non-financial assets

The group assesses whether there are any indicators of impairment for all non-financial assets on each reporting date. If there are indications of impairment, the cash-generating unit concerned is subjected to an impairment test. Goodwill and other indefinite life intangibles are tested for impairment annually and at other times when such indicators exist. Assets not available for use are tested for impairment in accordance with the requirements of IAS 36.10(a) using annual impairment tests at the level of the cash-generating unit. See note (13) for estimation assumptions made and the corresponding carrying amounts.

Government grants

When accounting for expense-based grants from public bodies, an estimate is made at the beginning, based on past experience, of the amount of the promised grant that can be utilized. The assumption made is reviewed regularly. If necessary, an adjustment is made for all or only for specific funding projects if special circumstances apply. The corresponding receivables and liabilities are presented in notes (12) and (17).

Judgment

Information about judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements is included in the notes below:

Development expenses

Development expenses are capitalized in accordance with the accounting policy described in note (4). Initial capitalization of costs is based on management judgment assuming that technological and economic feasibility is confirmed, usually when a product development project has reached a defined milestone according to an established project management model. The amount capitalized is determined by the project costs incurred In determining the determination of the recoverability of the capitalized amounts, management makes assumptions regarding the expected future cash generation of the assets, discount rates to be applied and the expected period of benefits. See note (13) for the carrying amounts involved.

(6) Principles of consolidation, scope of consolidation and shareholdings

Subsidiaries are all entities over which Adtran Networks SE directly or indirectly has control. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated at the date when the control ends. Adtran Networks SE controls an entity when it is exposed to or has the rights to variable returns from its involvement and has the ability to affect those returns through its power to direct the activities of the entity.

Intercompany revenues, expenses, income, receivables and payables within the group are eliminated.

Intercompany profits that arise from deliveries of products and services provided within the group are eliminated.

Business combinations

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquirees identifiable net assets. Acquisition costs incurred are expensed.

When a group company acquires a business, it assesses the financial assets and liabilities acquired for appropriate classification and designation in accordance with the contractual terms, economic circumstances and relevant conditions on the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

Any contingent consideration to be transferred by the acquirer will be recognized at fair value on the acquisition date. Subsequent changes in the fair value of contingent considerations that represent an asset or liability are recognized in the income statement in accordance with IFRS 9.

Goodwill is initially measured at cost being the excess of the consideration transferred over the group's net identifiable assets acquired and measured at fair value as well as liabilities assumed and measured at fair value. If this consideration is lower than the fair value of the net assets of the company acquired, the difference is recognized in profit or loss after reassessment.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the group's cash generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

Where goodwill forms part of a cash-generating unit and where part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.

Scope of consolidation

According to §315e HGB, the consolidated financial statements for the year ended December 31, 2025, include the financial statements of Adtran Networks SE plus all of the 19 (prior year: 19) wholly owned subsidiaries listed below (hereafter collectively referred to as "the group companies"):

	IFRSequity			Share in equityIFRS net
(in thousands)			income/(loss)	owneddirectly	ownedindirectly
Adtran Networks North America, Inc.,Norcross/Atlanta (Georgia), USA(Adtran Networks North America)	USD	88,291	6,427	— %	100 %
Adtran Networks (UK) Ltd., York, United Kingdom(Adtran Networks York)	GBP	10,083	593	100 %	— %
Oscilloquartz SA, Saint-Blaise, Switzerland(OSA Switzerland)	CHF	8,646	488	100 %	— %
Adtran Networks Spolka z o.o., Gdynia, Poland(Adtran Networks Poland)	PLN	77,684	5,880	100 %	— %
Adtran Networks Israel Ltd., Ra'anana/Tel Aviv, Israel(Adtran Networks Israel)	ILS	17,241	3,247	100 %	— %
Adtran Networks (Shenzhen) Ltd., Shenzhen, China(Adtran Networks Shenzhen)	CNY	37,405	2,274	100 %	— %
Oscilloquartz Finland Oy, Espoo, Finland(OSA Finland)	EUR	367	40	100 %	— %
Adtran Networks Service (Shenzhen) Ltd., Shenzhen, China(Adtran Networks Service)	USD	1,900	187	— %	100 %
Adtran Networks Singapore Pte. Ltd., Singapore(Adtran Networks Singapore)	SGD	3,287	317	100 %	— %
Adtran Networks Hong Kong Ltd., Hongkong, China(Adtran Networks Hongkong)	USD	1,289	30	— %	100 %
Adtran Networks IT Solutions India Private Limited, Gurgaon, India(Adtran Networks India)	INR	459,740	94,755	1 %	99 %
Adtran Networks Serviços Brasil Ltda., São Paulo, Brazil(Adtran Networks Brazil)	BRL	3,212	304	99 %	1 %
Adtran Networks Japan Co., Ltd., Tokyo, Japan(Adtran Networks Japan)	JPY	108,320	5,924	100 %	— %
Adtran Networks AB, Kista/Stockholm, Sweden(Adtran Networks Sweden)	SEK	6,886	1,397	100 %	— %
Adtran Networks NA Holdings Inc., Norcross/Atlanta (Georgia), USA(Adtran NA Holdings)	USD	60,709	(1)	100 %	— %
Adtran Networks Pty Ltd., Sydney (New South Wales), Australia(Adtran Networks Australia)	AUD	1,874	86	— %	100 %
Adtran Networks B.V., Hilversum, Netherlands(Adtran Networks Netherlands)	EUR	371	22	100 %	— %
Adtran Networks Canada Inc., Ottawa, Canada(Adtran Networks Canada)	CAD	4,816	278	100 %	— %
ADVA Network Security GmbH, Berlin, Germany(ANS)	EUR	49,985	1,554	100 %	— %

Due to a factoring agreement, a special purpose entity, True Value S.á r.l./Compartment 8, Luxembourg, is included in the consolidated financial statements in addition to the subsidiaries listed above (see also note (9)). Adtran Networks SE does not hold an equity interest in this company. Adtran Networks SE controls the main relevant activities in this entity despite not having an equity interest and thus influences the variable returns. Due to the consolidation, the present consolidated financial statements include, in particular, trade receivables amounting to EUR 11,853 thousand (prior year: EUR 13,340 thousand), purchased receivables from Adtran, Inc. amounting to EUR 7,366 thousand (prior year: EUR 9,184 thousand), that are included in other current assets, as well as current financial liabilities amounting to EUR 18,451 thousand (prior year: EUR 21,503

thousand). Adtran Networks SE does not hold an equity interest in this company. Adtran Networks SE controls the main relevant activities in this entity despite not having an equity interest and thus influences the variable returns.

Changes in the scope of consolidation

There were no changes to the scope of consolidation in 2025.

(7) Foreign currency translation

The functional currency of each group company is the currency of the main economic environment in which the company operates. The reporting currency of Adtran Networks' consolidated financial statements is the functional currency of the parent company, Adtran Networks SE (euro).

Currency translation on entity level

Transactions in foreign currencies are initially recorded by the group entities at their respective functional currency rates prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling on the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates on the dates of the initial transactions. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rates on the date when the fair value is determined. The exchange differences arising from the translation are recognized in profit or loss in financial income/ expense.

Currency translation on group level

The assets and liabilities of foreign operations are translated into euro at the rate of exchange prevailing on the reporting date, the equity items at the respective historical exchange rates. Items in the income statements are translated at the average rate for the reporting period. The exchange differences arising from the translation are recognized in accumulated other comprehensive income. On disposal of a foreign operation, the component of accumulated other comprehensive income related to that particular foreign operation is recognized in the income statement.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amount of assets and liabilities arising on acquisition are treated as assets and liabilities of the foreign operation and translated at the closing rate.

The relevant exchange rates for translating foreign operations into the reporting currency are as follows:

	Closing rate	Closing rate	Average rate	Average rate
	Dec. 31, 2025	Dec. 31, 2024	Jan. 1 to Dec. 31, 2025	Jan. 1 to Dec. 31, 2024
AUD	1.75430	1.67560	1.75082	1.63960
BRL	6.49290	6.47600	6.30759	5.80167
CAD	1.61040	1.50350	1.57694	1.48167
CHF	0.92930	0.94350	0.93686	0.95236
CNY	8.22160	7.62340	8.10692	7.78589
GBP	0.87120	0.82950	0.85649	0.84662
ILS	3.74350	3.81200	3.89085	4.00291
INR	105.58000	89.26850	98.18954	90.52907
JPY	183.48000	164.57000	168.64448	163.72561
PLN	4.22630	4.26550	4.24029	4.30520
SEK	10.81800	11.48650	11.06685	11.43201
SGD	1.50950	1.41660	1.47458	1.44565
USD	1.17570	1.04440	1.12744	1.08202

Notes to the consolidated statement of financial position

(8) Cash and cash equivalents

Cash and cash equivalents include current funds as well as current financial assets with a remaining maturity that does not exceed three months from the date of acquisition and that are readily convertible to a known amount of cash and only subject to an insignificant risk of changes in value.

On December 31, 2025, cash of EUR 4,211 thousand (December 31, 2024: EUR 3,991 thousand) is held in China and is subject to local exchange control regulations. These local exchange control regulations provide for restrictions on exporting capital from the country, other than through normal dividends.

Cash at banks earns interest at floating rates based on daily bank deposit rates.

Cash equivalents are invested for varying periods of between one day and three months, depending on the immediate cash requirements of the group, and earn interest at the respective short-term deposit rates. There are no cash equivalents at the reporting date.

(9) Trade accounts receivable

Trade accounts receivable are non-interest-bearing and are due within 30 to 120 days in general. No cash discount is granted in case of early payment. Generally, deliveries are made with Incoterm FCA (free carrier). For specific projects, other payment and delivery terms may be agreed.

Gross and net trade accounts receivable are as follows:

(in thousands of EUR)	Dec. 31, 2025	Dec. 31, 2024
Gross trade accounts receivable	115,433	111,169
Allowance for expected credit losses	(2,678)	(2,594)
Net trade accounts receivable	112,755	108,575

A reconciliation of the risk provision for trade accounts receivable carried at amortized cost is included in the table below:

(in thousands of EUR)	2025	2024
Jan. 1	2,594	3,487
Increase of risk provision	73	—
Release of risk provision	—	(132)
Addition of specific allowances	303	61
Usage	(285)	(928)
Foreign currency translation effects	(7)	106
Dec. 31	2,678	2,594

Further information on default risk from trade accounts receivable is included in note (34) on financial risk management.

In Q4 2023, the group transitioned from the pre-existing revolving factoring agreement to a joint receivable purchase and servicing agreement together with the sister company Adtran Inc., Huntsville, Alabama, USA, as an additional seller. The agreement resulted in the requirement to consolidate a special purpose entity. On December 31, 2025, the consolidation resulted in the recognition of trade receivables of EUR 11,853 thousand (December 31, 2024: EUR 13,340 thousand). We refer to note (6).

(10) Inventories

The table below summarizes the composition of inventories:

(in thousands of EUR)	Dec. 31, 2025	Dec. 31, 2024
Raw materials, supplies and work in progress	29,251	31,398
Finished goods	54,791	59,744
	84,042	91,142

In 2025, impairment of inventories amounting to EUR 7,437 thousand (prior year: EUR 8,428 thousand) was recognized as an expense within cost of goods sold. This amount includes reversals of earlier write-downs amounting to EUR 1,770 thousand (prior year: EUR 1,339 thousand) due to higher selling and input prices.

In 2025 and 2024, material costs of EUR 192,035 thousand and EUR 165,648 thousand, respectively, have been recognized.

As part of a credit facility agreement, security rights were granted on significant parts of inventories. Please refer to note (36).

(11) Contract assets

Contract assets amounting to EUR 162 thousand (prior year: EUR 211 thousand) relate to claims from return deliveries. Contract assets are subject to the impairment requirements of IFRS 9, however the identified impairment losses were insignificant.

(12) Other current and non-current assets

Other current assets are as follows:

(in thousands of EUR)	Dec. 31, 2025	Dec. 31, 2024
Non-financial assets
Advance payments to contract manufacturers	19,307	37,088
Prepaid expenses	4,766	5,182
Receivables due from tax authorities	4,770	4,884
Other	680	272
Total current non-financial assets	29,523	47,425
Financial assets
Receivables from Adtran Holdings, Inc. from loss absorption	23,783	47,103
Receivables from Adtran Holdings, Inc. related to share-based payment instruments	824	—
Government grant allowances for research projects	15,213	24,043
Receivables from sale of debt instruments of Adtran, Inc.	7,366	9,184
Positive fair values of derivative financial instruments	—	545
Duty refund	964	1,505
Insurance reimbursements	—	1,113
Other	3,012	1,537
Total current financial assets	51,162	85,032
	80,686	132,457

Other current assets are non-interest-bearing and are generally due within 0 to 60 days.

The significant decrease in advance payments to contract manufacturers relates to reimbursements of prepayments for inventories in line with the ongoing consumption of these materials in the production process.

Due to materiality reasons, no impairment for expected credit losses was considered for receivables from loss absorption receivables related to share-based payment instruments or to receivables from the sale of debt instruments of other entities. With regard to the receivable from the sale of Adtran, Inc. debt instruments, please refer to the comments in note (6). Further information on the profit and loss transfer agreement with Adtran Holdings, Inc. and on derivative financial instruments can be found in notes (21) and (33) respectively. The receivables to Adtran Holdings, Inc. related to share-based payment instruments in 2025 resulted from the forfeitures of all instruments of the former chief financial officer.

Other non-current assets are as follows:

(in thousands of EUR)	Dec. 31, 2025	Dec. 31, 2024
Financial assets
Government grant allowances for research projects	9,360	15,187
Rent deposits	2,056	1,838
Other	113	95
Total non-current assets	11,529	17,120

On December 31, 2025, government grants for 30 research projects are recognized (December 31, 2024: 26 research projects). These public grants relate to programs promoted by the EU and national governments. Due to the high credit ratings of the funding providers, which are exclusively state institutions, Adtran Networks does not expect any defaults.

The decrease in current and non-current assets from subsidies is due to fewer new subsidy agreements being concluded in 2025 and utilization. In 2022, the group was guaranteed a maximum subsidy of EUR 31,704 thousand for one project. The subsidy approval requires the creation of a mid-double-digit number of additional permanent jobs at specific locations in Germany and ensuring that these jobs remain in place for five years after the end of the project. Non-fulfillment of the subsidy requirements may lead to adjustments of the subsidy amount; however, there is no contractual repayment obligation. As of December 31, 2025, management expects that the conditions will be met.

The remaining book value of all subsidies on December 31, 2025, was EUR 24,573 thousand (2024: EUR 39,230 thousand). Further information on the assumptions made in accounting for government grants is included in note (5).

The rent deposits are mainly assets held in trust. Adtran Networks does not expect any defaults.

On December 31, 2025 and 2024, no non-financial non-current assets have been reported.

The classification of financial instruments according to IFRS 9 is included in note (33).

(13) Fixed assets

The following changes in fixed assets were recorded in 2025 and 2024:

	Historical cost				Accumulated depreciation					Net book values
(in thousands of EUR)	Jan. 1,2025	Additions	Disposals/retirements	Reclassifications	Currencytranslationadjustments	Dec. 31,2025	Jan. 1,2025	Depreciationof theperiod	Impairmentof theperiod	Depreciation ondisposals/retirements	Reversalof writedown	Currencytranslationadjustments	Dec. 31,2025	Dec. 31,2025	Dec. 31,2024
Right-of-use assets
Leased cars	5,030	841	(20)	—	3	5,854	3,168	1,110	—	(20)	—	10	4,268	1,586	1,862
Leased premises	44,304	4,268	(4,569)	—	(1,482)	42,522	20,641	4,844	—	(4,110)	(101)	(1,029)	20,245	22,276	23,663
	49,334	5,109	(4,589)	—	(1,479)	48,375	23,809	5,955	—	(4,131)	(101)	(1,020)	24,513	23,862	25,525
Property, plant and equipment
Land and buildings	29,678	887	(520)	—	(559)	29,487	16,547	1,471	—	(520)	—	(454)	17,044	12,443	13,131
Technical equipment and machinery	144,734	8,876	(29,849)	140		(5,443) 118,457 125,222		9,817	—	(29,677)	—		(5,074) 100,288	18,170	19,512
Factory and office equipment	19,889	1,439	(4,646)	4	(705)	15,982	17,289	1,419	—	(4,624)	—	(645)	13,439	2,543	2,600
Assets under construction	144	325	—	(144)	(6)	319	—	—	—	—	—	—	—	319	144
	194,445	11,527	(35,015)	—		(6,713) 164,244 159,058		12,707	—	(34,821)	—		(6,174) 130,770	33,474	35,388
Intangible assets
Goodwill	124,827	—	—	—		(8,132) 116,694	74,621	—	—	—	—	(3,254)	71,367	45,328	50,206
Capitalized development projects	427,669		39,422 (175,621)	—		— 291,470 327,061		45,094	—	(175,621)	—		— 196,534		94,936 100,608
Thereof capitalized development projects in progress	14,214	18,325	—	(5,540)	—	27,000	—	—	—	—	—	—	—	27,000	14,215
Intangible assets acquired in business combinations	81,153	—	—	—	(6,097)	75,056	77,018	1,277	—	—	—	(5,647)	72,648	2,408	4,135
Other purchased and internally generated intangible assets	108,868	22,931	(11,771)	—		(661) 119,367	70,832	7,985	—	(11,767)	—	(646)	66,404	52,963	38,036
Thereof internally generated intangible assets in progress	8,066	12,575	—	(2,692)	—	17,949	—	—	—	—	—	—	—	17,949	8,066
	742,517		62,353 (187,392)	—		(14,890) 602,587 549,532		54,356	—	(187,388)	—		(9,547) 406,952		195,635 192,985
	986,296		78,989 (226,996)	—		(23,082) 815,207 732,399		73,017	—	(226,340)	(101)		(16,741) 562,235		252,972 253,898

	Historical cost				Accumulated depreciation						Net book values
(in thousands of EUR)	Jan. 1,2024	Additions	Disposals/retirements	Reclassifications	Currencytranslationadjustments	Dec. 31,2024	Jan. 1,2024	Depreciationof theperiod	Impairmentof theperiod	Depreciation ondisposals/retirements	Reversalof writedown	Currencytranslationadjustments	Dec. 31,2024	Dec. 31,2024	Dec. 31,2023
Right-of-use assets
Leased cars	4,096	882	—	—	53	5,030	2,158	978	—	—	—	33	3,168	1,862	1,939
Leased premises	44,420	4,576	(5,965)	—	1,272	44,304	18,090	5,289	—	(3,437)	—	698	20,641	23,663	26,331
	48,517	5,457	(5,965)	—	1,325	49,334	20,247	6,267	—	(3,437)	—	731	23,809	25,525	28,269
Property, plant and equipment
Land and buildings	28,068	1,180	(3)	138	295	29,678	15,034	1,276	—	(3)	—	240	16,547	13,131	13,035
Technical equipment and machinery	136,292	8,360	(3,154)	178		3,058 144,734 114,428		10,933	—	(2,973)	—		2,833 125,222	19,512	21,864
Factory and office equipment	18,833	1,072	(459)	2	440	19,889	15,832	1,489	—	(427)	—	394	17,289	2,600	3,001
Assets under construction	2,011	79	—	(1,954)	7	144	—	—	—	—	—	—	—	144	2,011
	185,205	10,691	(3,616)	(1,635)		3,800 194,445 145,294		13,698	—	(3,402)	—		3,468 159,058	35,388	39,911
Intangible assets
Goodwill	120,153	—	—	—		4,673 124,827	55,254	—	17,371	—	—	1,996	74,621	50,206	64,899
Capitalized development projects	391,179	36,490	—	—		— 427,669 286,624		40,437	—	—	—		— 327,061 100,608 104,555
Thereof capitalized development projects under construction	39,214	4,648	—	(29,647)	—	14,215	—	—	—	—	—	—	—	14,215	39,214
Intangible assets acquired in business combinations	78,131	—	—	—	3,022	81,153	72,891	1,360	—	—	—	2,767	77,018	4,135	5,241
Other purchased and internally generated intangible assets	92,236	14,781	(78)	1,635		294 108,868	65,991	4,565	—	(77)	—	353	70,832	38,036	26,245
Thereof internally generated intangible assets in progress	18,927	7,531	—	(18,392)	—	—	8,066	—	—	—	—	—	—	8,066	18,927
	681,699	51,271	(78)	1,635		7,989 742,517 480,760		46,362	17,371	(77)	—		5,116 549,532 192,985 200,939
	915,421	67,419	(9,659)	—		13,115 986,296 646,302		66,327	17,371	(6,916)	—		9,315 732,399 253,898 269,119

Right-of-use assets

Lease terms of between 36 and 120 months were applied considering the minimum rental periods and contractual extension options. In 2025, depreciation of EUR 1,110 thousand for vehicles (2024: EUR 978 thousand) and EUR 4,844 thousand for office and building rentals (2024: EUR 5,289 thousand) are included in operating profit. No impairment losses were recognized in 2025 and 2024.

In 2025 an amount of EUR 433 thousand, which relates to short-term leases is recognized in profit and loss (2024: EUR 667 thousand). In addition, in 2025 variable payments of EUR 3,481 thousand were not included in the measurement of lease liabilities and are also recognized in profit and loss (2024: EUR 3,252 thousand). These mainly relate to operating costs and maintenance of leased assets. There are no major lease payments related to low value contracts. In the cash flow statement, the cash outflows resulting from these items are included in the cash flow from operating activities.

Further information on the corresponding lease liabilities is provided in note (15).

Property, plant and equipment

The classification and changes in property, plant and equipment are shown in the analysis of changes in fixed assets.

In 2025 the level of disposals increased compared to the prior year due to a group-wide fixed asset cleanup, which included the derecognition of old assets with a net book value of zero and historical costs below defined thresholds. In addition, fixed asset inventory counts were performed in Adtran Networks SE, Adtran Networks North America Inc., Adtran Networks (UK) Ltd. and Adtran Networks Spolka z o.o., Poland.

In 2025 and 2024, there were neither impairments nor write-backs of property, plant and equipment impaired in prior years.

As part of a credit facility agreement, security rights were granted on significant parts of the tangible fixed assets. Please refer to Note (36).

Goodwill

The table below shows the composition of goodwill allocated to cash-generating units:

(in thousands of EUR)	Dec. 31, 2025	Dec. 31, 2024
Adtran Networks SE plus	27,543	30,187
Adtran Networks North America	17,784	20,019
	45,328	50,206

Impairment of goodwill

In 2025, no impairment losses on goodwill had to be considered.

Key assumptions used in impairment testing

All entities, which are acting on their own account and are capable to generate cash inflows independently based on own customer relationships and own distribution channels are considered as separate cash-generating units. All dependent development service providing, logistical service and sales service providing entities are considered together with the Adtran Networks SE in one combined cash-generating unit (Adtran Networks SE plus). This as Adtran Networks SE as owner of all technologies is responsible for future developments and utilization and cost-plus contracts exist between the respective companies and Adtran Networks SE for the remuneration of the services. In addition to the research services described, Adtran Networks SE plus produces independently and sells products in the EMEA, Americas and Asia-Pacific markets. For impairment test purposes goodwill is generally allocated to the cash-generating unit in which goodwill was originally allocated on acquisition of the entity. Therefore, 50 % (prior year: 61 %) of the goodwill recognized in the course of the acquisition of Overture Networks Inc. after consideration of the partial impairment in 2025 in the cash-generating unit Adtran Networks SE plus has been allocated to Adtran Networks SE plus and 50 % (prior year: 39 %) has been allocated to Adtran Networks North America based on fair value of technology and customer relationship at the date of the acquisition. Accordingly, goodwill from the acquisition of the MRV Communications group after consideration of the partial impairment in 2025 in the cash-generating unit Adtran Networks SE plus was allocated to the cash-generating units Adtran Networks SE plus and Adtran Networks North America in a ratio of 68 : 32 % (prior year: 77% to 23%). Unchanged from prior years, the cash-generating units are Adtran Networks SE plus, Adtran Networks York, Adtran Networks North America and OSA Switzerland. The goodwills allocated to Adtran Networks York and OSA Switzerland has been fully impaired in previous years.

On December 31, 2025 and 2024, the value in use of the goodwill was calculated based on future cash flows (discounted-cashflow-method). The calculation is most sensitive to the following assumptions:

• Revenue growth
• EBIT margins
• Discount rates
• Terminal Value growth rate

Cash flows include the projected cash flows for the four subsequent years as per the approved budget and four-year planning from 2026 - 2029. For further periods, a perpetual income is estimated based on nil growth with inflation offset. The discount rate used for the calculation is calculated according to the Capital Asset Pricing Model (CAPM). The cost of equity is composed of a risk-free interest rate and a specific risk mark-up calculated as the difference of the average market rate of return and the risk-free interest rate multiplied with the specific risk related to the company (beta coefficient). The beta coefficient is calculated on a peer group basis. The calculation uses pre-tax discount rates depending on the different cash generating units.

Following estimates were used to determine the fair value of the cash-generating units:

	2025		2024
(in %)	Adtran NetworksSE plus	Adtran NetworksNorth America	Adtran NetworksSE plus	Adtran NetworksNorth America
Average revenue growth p.a.	9.45	8.48	14.94	7.64
Average EBIT margin p.a.	6.83	4.62	7.65	4.43
Pre-tax discount rate	12.61	12.86	13.46	13.81
Terminal value growth rate	1.50	1.50	1.00	1.00

Sensitivity analysis

As part of the annual impairment testing in 2025, a sensitivity analysis was conducted with regard to headroom, defined as the difference between a CGU's fair value and its carrying amount. Management noted that a possible change in the assumptions shown in the above table could lead to a situation where the carrying amount of the respective CGU exceeds the fair value.

The following deterioration in the underlying calculation assumptions would result in impairment requirement in the cashgenerating unit Adtran Networks SE plus:

• Reduction of 1.03 % in growth of EBIT margin
• Increase of 0.6 pp in discount rate
• Reduction of 0.8 pp in terminal value growth rate

In the cash-generating unit Adtran Networks North America, the value in use is significantly higher than the carrying amount.

Capitalized development projects, intangible assets acquired in business combinations and other purchased and internally generated intangible assets

The table below summarizes the carrying amounts:

(in thousands of EUR)	Dec. 31, 2025	Dec. 31, 2024
Capitalized development projects	94,936	100,608
Intangible assets acquired in business combinations	2,408	4,135
Other purchased and internally generated intangible assets	52,963	38,107
	150,307	142,850

Capitalized development projects include expenses related to the development of technologies and products for connectivity solutions for cloud4 and mobile services, network functions virtualization and synchronization. The capitalized development projects mainly include the development of the SFlexTM 400G Layer-1 Encryption product, with a book value of EUR 10,872 thousand (prior year-end: EUR 16,280 thousand) and a remaining useful life of approximately two years, which supports the

4 Cloud in the context of IT describes a concept where applications no longer run on the user's in-house IT infrastructure (for example, a server) but are outsourced to a service provider whose IT infrastructure is not visible or known in detail – as if it was hidden in a cloud. A typical example is the use of software as a service, where the software is not stored on the user's machine, but on servers of the software service provider.

latest SAN/Mainframe applications as well as 64G Fibre Channel technology, as well as the development of an integrated optical engine with a book value of EUR 9,272 thousand (prior year-end: EUR 8,167 thousand) which is currently still under construction. Additionally, the other purchased and internally generated intangible assets mainly include the development of a digital signal processor in collaboration with a partner company, with a book value of EUR 18,249 thousand and a remaining useful life of approximately nine years, as well as capitalizable license costs and internal expenses for the creation of production masks.

In 2025, borrowing costs of EUR 819 thousand (2024: EUR 1,214 thousand) were capitalized related to development projects with an expected duration of more than 12 months. Borrowing costs were capitalized at the weighted average rate of the financial liabilities of 7.8 %.

In 2025, disposals of capitalized development projects increased compared to the prior year due to a cleanup initiative in which projects with a net book value of zero were derecognized based on predefined useful-life criteria.

Intangible assets acquired in business combinations as of December 31, 2025 consist solely of the purchased customer relationship acquired in the MRV acquisition, with a carrying amount of EUR 2,408 thousand (2024: EUR 4,135 thousand).

Amortization of intangible assets with a finite useful life comprises:

(in thousands of EUR)	Dec. 31, 2025	Dec. 31, 2024
Capitalized development projects	45,094	40,437
Intangible assets acquired in business combinations	1,277	1,360
Other purchased and internally generated intangible assets	7,985	4,565
	54,356	46,362

Amortization of intangible assets acquired in business combinations are as follows:

(in thousands of EUR)	Dec. 31, 2025	Dec. 31, 2024
Purchased customer relationships Overture	—	30
Purchased customer relationship MRV	1,277	1,331
	1,277	1,361

At initial recognition the useful lives of intangible assets acquired in business combinations were as follows:

Purchased customer relationships Overture	8 years
Purchased customer relationship MRV	9 years, 9 months

In 2025 and 2024, no impairment for capitalized development projects as well as purchased technologies was recognized.

In the consolidated income statement, amortization and impairment of capitalized development projects and amortization of purchased technology is included in cost of goods sold. Amortization of purchased customer relationship assets is included in selling and marketing expenses.

As part of a credit line agreement, the company granted security rights over substantially all of their tangible and intangible assets. Please refer to note (36).

(14) Loans granted

On June 4, 2024, Adtran Networks SE granted a loan to Adtran, Inc. amounting to USD 17,121 thousand. The loan matures latest 6 months from July 18, 2027 and bears interest at a 1.00 % margin plus 3-month Term SOFR which is set at the beginning of each quarter. The average interest rate for 2025 was 5.21 %. The carrying amount of the loan on December 31, 2025, was EUR 15,352 thousand.

No valuation allowances due to expected credit losses were recognized for reasons of materiality. Further information on valuation can be found in Note (34).

(15) Lease liabilities

The interest expense related to lease liabilities of EUR 1,501 thousand is included in the financial result (2024: EUR 1,393 thousand). In 2025, total cash outflows for lease agreements amounted to EUR 11,391 thousand (2024: EUR 10,863 thousand).

The maturity of lease liabilities is as follows:

(in thousands of EUR)	Dec. 31, 2025	Dec. 31, 2024
Up to 1 year	5,557	6,047
One to three years	11,358	9,351
More than three years	9,610	13,402
	26,524	28,800

Some lease agreements for office space contain renewal options that can be exercised by Adtran Networks. At the beginning of each lease agreement, an assessment is made as to whether the exercise of the extension options included is sufficiently certain. As at December 31, 2025, this results in possible future rental payments, that would result in a lease liability of EUR 16,877 thousand (2024: EUR 13,456 thousand), which are not included in lease liabilities. Furthermore, the future cash outflows for leases that have been concluded but not yet commenced amount to EUR 85 thousand (2024: EUR 480 thousand).

(16) Liabilities to banks

On June 4, 2024, Adtran Networks as additional debtor entered into a loan agreement (Senior Secured Credit Facility) of Adtran Holdings, Inc. with Wells Fargo Bank and other lenders. At year-end 2025, the 6th amendment to the previously existing agreement allows for a USD 50,000 thousand (prior year: USD 74,000 thousand) subline available for borrowings by Adtran Networks SE (the "subline"). At December 31, 2025, Adtran Networks SE had no outstanding borrowings from this agreement (prior year-end: EUR 46,917 thousand (USD 49,000 thousand)).

The loan agreement matures on July 18, 2027. The average variable interest rate for the loan in 2025 amounted to 8.88 % p.a. Interest of EUR 2,925 thousand (USD 3,269 thousand) was paid in 2025 (EUR 3,148 thousand (USD 3,394 thousand) for the period from June 4, 2024 to the end of 2024). Further information on the financial covenants can be found in note (35).

In December 2023, Adtran Networks concluded a factoring agreement. The recognition of this agreement resulted in a current financial liability of EUR 18,451 thousand as at December 31, 2025 (prior year-end: EUR 21,503 thousand). Further details on the recognition of the special purpose entity are included in note (6).

(17) Trade accounts payable and other current and non-current liabilities

The trade accounts payable are non-interest-bearing and generally due within 30 to 90 days.

Other current liabilities are as follows:

(in thousands of EUR)	Dec. 31, 2025	Dec. 31, 2024
Non-financial liabilities
Liabilities to employees for variable compensation and payroll	6,752	6,620
Liabilities to employees for vacation	2,078	2,077
Liabilities due to withheld wage income tax and social security contribution	5,307	4,802
Liabilities due to tax authorities	2,772	3,771
Obligations from subsidized research projects	13,216	22,348
Total current non-financial liabilities	30,124	39,617
Financial liabilities
Liabilities in connection with the consolidation of a special purpose entity	1,120	1,422
Liabilities related to license agreements	5,444	1,270
Other	2,361	2,202
Total current financial liabilities	8,925	4,894
	39,049	44,511
Other non-current liabilities include:
(in thousands of EUR)	Dec. 31, 2025	Dec. 31, 2024
Non-financial liabilities
Obligations from subsidized research projects	8,626	14,846
Total non-current non-financial liabilities	8,626	14,846
Financial liabilities
Liabilities related to license agreements	4,354	—
Other	255	579
Total non-current financial liabilities	4,609	579
	13,235	15,425

The increase in liabilities related to license agreements mainly relates to the renewal of one agreement in 2025. The final payment related to this agreement is due in August 2028.

The classification of financial instruments according to IFRS 9 is included in note (33).

(18) Provisions for pensions and similar employee benefits

Post-employment benefit plans are classified as either defined contribution or defined benefit plans.

Plan assets related to defined contribution plans are managed separately from the assets of the relevant company by a trustee. For such plans, the company pays fixed contributions into a separate entity or a fund and does not assume any other obligations. Payment obligations to defined contribution plans are recognized in profit or loss when they occur. Payment to government managed pension plans with fixed contributions are considered as defined contribution plans. Adtran Networks group maintains defined contribution plans in different group companies. In 2025, total expenses related to defined contribution plans amount to EUR 11,921 thousand (prior year: EUR 11,125 thousand).

Under defined benefit plans the company is required to pay agreed benefits granted to present and past employees. Defined benefit plans may be funded or unfunded. The group maintains defined benefit plans in Switzerland, Italy, India, Israel and Poland.

The defined benefit plans in Switzerland are remuneration-dependent commitments for which a guaranteed minimum interest rate is set. Benefits paid in conjunction with these plans comprise old-age retirement pensions as well as invalidity and surviving dependents' benefits. The assets of the pension plans are managed by trustees. The administration is carried out in accordance with local legal requirements. In Switzerland, in addition to the regular case of pension payments at retirement age, the retirement assets can also be paid out in full or in part as a lump sum. Furthermore, in certain cases, for example in the event of the acquisition of residential property, there is the possibility of early withdrawal of the retirement assets. In the event of a change of job, the employee's retirement assets are transferred from the pension fund of the previous employer to the pension fund of the new employer.

The pension plans in Israel, Italy, India and Poland are defined benefit plans, which in the case of Italy, India and Poland are unfunded. The assets of the pension plan in Israel are managed by trustees in accordance with local legal requirements. In Italy, Israel and India, a single lump-sum payment is usually made upon retirement.

On December 31, 2025, Adtran Networks reports provisions for pensions amounting to EUR 4,920 thousand (December 31, 2024: EUR 6,169 thousand).

The carrying amount are as follows:

(in thousands of EUR)	Dec. 31, 2025	Dec. 31, 2024
Present value of defined benefit obligations	28,771	29,187
Fair value of plan assets	(23,851)	(23,019)
Provisions for pensions and similar employee benefits	4,920	6,169

The change in the net defined benefit liability for pension plans derives as follows:

(in thousands of EUR)	Defined benefitobligations	Fair value ofplan assets	Total
Jan. 1, 2024	29,580	(22,846)	6,734
Expenses and income
Current service cost	1,015	—	1,015
Past service cost	(806)	—	(806)
Interest expense (+)/income (-)	636	(474)	162
Remeasurements
Gains (-)/losses (+) arising from changes in financial assumptions	1,371	—	1,371
Gains (-)/losses (+) arising from changes in demographic assumptions	—	—	—
Gains (-)/losses (+) arising from experience	(97)	—	(97)
Gains (-)/losses (+) on plan assets, excluding amounts included in interestincome	—	(853)	(853)
Liability assumed through transfer of employees	—	—	—
Employee contributions	396	(396)	—
Transfers to funds	—	(792)	(792)
Assets distributed on settlements	—	69	69
Benefits paid through plan assets and payments made to plan assets, net	(2,070)	2,070	—
Disbursements of Adtran Networks	(626)	—	(626)
Exchange rate differences and other changes	(212)	204	(8)
Dec. 31, 2024	29,187	(23,018)	6,169
Expenses and income
Current service cost	1,055	—	1,055
Past service cost	845	—	845
Interest expense (+)/income (-)	502	(368)	134
Remeasurements
Gains (-)/losses (+) arising from changes in financial assumptions	(470)	—	(470)
Gains (-)/losses (+) arising from changes in demographic assumptions	—	—	—
Gains (-)/losses (+) arising from experience	(876)	—	(876)
Gains (-)/losses (+) on plan assets, excluding amounts included in interestincome	—	(959)	(959)
Employee contributions	394	(394)	—
Transfers to funds	—	(782)	(782)
Assets distributed on settlements	—	54	54
Benefits paid through plan assets and payments made to plan assets, net	(1,952)	1,952	—
Disbursements of Adtran Networks	(191)	—	(191)
Exchange rate differences and other changes	277	(336)	(59)
Dec. 31, 2025	28,771	(23,851)	4,920

The payments made to plan assets result in particular from vested benefits brought in by joining the company as well as from other payments and repayments of benefits drawn in advance to top up the pension fund.

The past service cost (income) in 2024 mainly resulted from the reduction in conversion rates by the foundation in Switzerland until 2027. In 2025, this item includes the expense from first-time recognition of a pension obligation in Poland.

On December 31, 2025, EUR 25,856 thousand of the defined benefit obligations relate to active employees and EUR 2,915 thousand relate to pensioners (prior year: EUR 26,138 thousand and EUR 3,050 thousand, respectively).

The average remaining period of service for employees and the weighted average duration of the obligations as of December 31, 2025 are as follows:

(in years)	Switzerland	Italy	India	Israel	Poland
Average remaining period of service	8.80	10.30	n/a	n/a	19.60
Weighted average duration	14.20	6.30	7.00	8.60	13.80

On December 31, 2024 the average remaining period of service and the weighted average duration are as follows:

(in years)	Switzerland	Italy	India	Israel
Average remaining period of service	8.80	10.90	n/a	n/a
Weighted average duration	14.60	6.80	7.00	7.60

In general, the monthly payment of pensions starts if an employee in Switzerland reaches the retirement age, while in Israel, Italy and India a lump sum payment of the relevant accrued amount applies with retirement or resignation of an employee.

Employer contributions in 2026 are expected to amount to EUR 778 thousand (2024 expected for 2025: EUR 778 thousand). The expected pension payments for 2026 amount to EUR 1,692 thousand. In 2024 pension payments of EUR 1,557 thousand had been expected for 2025.

In 2025, the projected units credit method is used to calculate the defined benefit obligations considering the following material assumptions for valuation parameters:

	Switzerland	Italy	India	Israel	Poland
Discount rate	1.18 %	3.33 %	6.40 %	4.80 %	5.30 %
Inflation rate	0.75 %	2.00 %	n/a	2.00 %	n/a
Salary level trend	0.75 %	2.25 %	7.00 %	2.00 %	4.00 %
Pension level trend	0.00 %	n/a	n/a	n/a	n/a

In 2024, the following valuation parameters have been assumed:

	Switzerland	Italy	India	Israel
Discount rate	0.98 %	3.14 %	6.70 %	5.60 %
Inflation rate	0.75 %	2.00 %	n/a	2.40 %
Salary level trend	0.75 %	2.25 %	7.00 %	2.00 %
Pension level trend	0.00 %	n/a	n/a	n/a

Discount rates have been determined considering the weighted average duration of the obligations. The evaluation for Switzerland, Italy and Israel is based on high-quality corporate bonds with AA-rating. For India and Poland, the discount rate is based on government bond rates.

Adtran Networks is exposed to risks arising from defined benefit plans. Changes in actuarial parameters, especially in discount rates, may have significant influence on the pension obligations.

The sensitivity analysis provided below shows the extent to which the defined benefit obligation would have been affected by changes in the relevant assumptions in 2025:

(in thousands of EUR)		Change indefined benefitobligation
Discount rate	Increase by 0.25 %	(794)
	Decrease by 0.25 %	844
Salary level trend	Increase by 0.25 %	119
	Decrease by 0.25 %	(114)
Pension level trend	Increase by 0.10 %	178
Life expectancy	Increase by 1 year	447
	Decrease by 1 year	(452)

The sensitivity analysis in prior year were as follows:

(in thousands of EUR)		Change indefined benefitobligation
Discount rate	Increase by 0.25 %	(840)
	Decrease by 0.25 %	889
Salary level trend	Increase by 0.25 %	83
	Decrease by 0.25 %	(83)
Pension level trend	Increase by 0.10 %	194
Life expectancy	Increase by 1 year	494
	Decrease by 1 year	(497)

Sensitivities for discount rate, salary level and pension trend have been considered in turn disregarding any potential dependencies between these assumptions. With exception of pension trend considerations separate actuarial computations have been performed for increase and decrease of the assumptions. Due to the structure of the pension plans, no sensitivity was determined for the case of falling pensions. This only applies to the pension plans in Switzerland, as all other arrangements assume lump-sum payments at the time of reaching retirement age.

Adtran Networks assumes inflation rate to have minor impact on the amount of defined benefit obligations.

On December 31, 2025, plan assets split to major asset categories as follows:

	Quoted marketprices	Other than quotedmarket prices
Equity instruments	32.12 %	—
Bonds	28.16 %	—
Real estate	23.22 %	—
Alternative investments	10.41 %	—
Qualified insurance policies	—	1.25 %
Cash and cash equivalents	—	1.99 %
Other	—	2.85 %

On December 31, 2024, plan assets split to major asset categories as follows:

	Quoted marketprices	Other than quotedmarket prices
Equity instruments	30.47 %	—
Bonds	30.17 %	—
Real estate	21.65 %	—
Alternative investments	10.17 %	—
Qualified insurance policies	—	1.36 %
Cash and cash equivalents	—	2.27 %
Other	—	3.91 %

Pension fund assets are monitored continuously and managed from a risk-and-yield perspective by the external trustees.

(19) Other provisions

The table below lists changes in the composition of the group's other provisions in the reporting period:

(in thousands of EUR)	Jan. 1, 2025	Usage	Release	Appropriation	Currencytranslationdifference	Dec. 31, 2025
Current provisions
Warranty provision	158	(27)	—	21	1	152
Personnel provisions	3,010	(2,218)	(697)	2,907	(49)	2,953
Consulting fees	1,918	(1,831)	(24)	537	(2)	598
Supplier obligations	7,794	(7,308)	(70)	4,804	(69)	5,152
Other current provisions	1,572	(1,441)	(124)	2,005	(14)	1,998
Total current provisions	14,451	(12,825)	(914)	10,275	(134)	10,852
Non-current provisions
Warranty provision	1,068	(221)	—	52	1	900
Non-current personnel provisions	—	—	—	932	—	933
Other non-current provisions	78	(78)	—	32	(1)	30
Total non-current provisions	1,146	(299)	—	1,015	—	1,863
Provisions total	15,598	(13,123)	(914)	11,290	(134)	12,715

The estimated expenses related to warranty claims reflect both past experience and current developments and are based on a percentage of sales revenues. The non-current warranty provisions mainly relate to a period of 12 to 24 months after the balance sheet date. Any differences between actual amounts and anticipated amounts are treated as changes in accounting estimates and affect earnings in the period in which the change occurs.

Current personnel provisions mainly include expenses for bonus payments as well as employee's accident insurance and other expenses resulting from legal requirements.

Obligations to suppliers relate to inventories with a slow turnover rate.

Other long-term personnel provisions include amounts for obligations arising from anniversary bonus payments from 2025 onwards.

The reversals of provisions from previous years will be reported in the respective operating costs. Other operating income only includes reversals of provisions from special items.

(20) Contract liabilities and refund liabilities

Contract and refund liabilities are as follows:

(in thousands of EUR)	Dec. 31, 2025	Dec. 31, 2024
Current contract liabilities
Advance payments received	10,291	1,170
Current contract liabilities related to customer loyalty programs	363	411
Current deferred revenues related to service level agreements	26,818	24,146
Total current contract liabilities	37,472	25,726
Current refund liabilities	279	364
Total refund liabilities	279	364
Non-current contract liabilities

Non-current deferred revenues related to service level agreements	16,059	13,220
Total non-current contract liabilities	16,059	13,220
	53,810	39,310

Current contract liabilities related to customer loyalty programs include mainly expected volume discounts and refunds to customers.

The revenues generated in the reporting period from contract liabilities existing at the beginning of the period amounted to EUR 24,276 thousand (previous year: EUR 24,304 thousand).

Management expects that 63 % of the outstanding or partially outstanding benefit obligations as of December 31, 2025, will be recognized as revenue in the 2026 financial year. The remaining 37 % is expected to be recognized as sales in the financial year 2027. The amount stated does not include variable compensation components which are limited. Non-current contract liabilities in the amount of EUR 16,059 thousand mainly relate to advance payments for services that will be provided in more than 12 months.

(21) Stockholders' equity

Common stock and share capital

On December 31, 2025, Adtran Networks SE had issued 52,054,500 (prior year: 52,054,500) no par value bearer shares (hereinafter "common shares"), each representing a notional amount of share capital of EUR 1.00.

The common shares entitle the holder to vote at the annual general meeting.

On December 1, 2022, the Company entered into a domination and profit and loss transfer agreement with Adtran Holdings, Inc., based in Wilmington, USA (Division of Corporations of the State of Delaware No. 6141966) as the controlling company, which was approved by the Annual General Meeting by resolution of November 30, 2022. The domination and profit and loss transfer agreement was entered in the commercial register on January 16, 2023. Based on this domination and profit and loss transfer agreement, Adtran Networks SE is obliged to transfer all of its profits to Adtran Holdings, Inc. Subject to the creation or dissolution of reserves pursuant to Section 2 Paragraph 2, the maximum amount permitted under Section 301 of the German Stock Corporation Act (AktG) in its currently applicable version shall be transferred. The holders of the ordinary shares (with the exception of Adtran Holdings, Inc. as the majority shareholder) are entitled to an annual compensation payment (EUR 0.52 net per share) to be made by Adtran Holdings, Inc. under the existing domination and profit and loss transfer agreement. Moreover, under the existing control and profit and loss transfer agreement, the holders of the ordinary shares continue to have the right to sell the shares to Adtran Holdings, Inc. for a cash settlement price of EUR 17.21.

There are no further restrictions with regard to ordinary shares.

Authorized capital

In the annual shareholder´s meeting on June 28, 2024, a new authorized capital 2024/I in the amount of EUR 26,027 thousand was approved. According to the company's articles of association, the management board is authorized, subject to the consent of the supervisory board, to increase subscribed capital until June 27, 2029, only once or in successive tranches by a maximum of EUR 26,027,250 by issuing new common shares in return for cash or non-cash contributions (authorized capital 2024/I). Subject to the consent of the supervisory board, the management board is further authorized to decide whether to exclude stockholders' subscription rights. Stockholders' subscription rights can be excluded for capital increases for cash contributions as well as contributions in kind if during the term of this authorization and in exclusion of shareholder subscription rights, the shares issued against contributions in cash or in kind do not exceed 20 % of the share capital.

Conditional capital

The conditional capital 2011/I was cancelled in the annual shareholder´s meeting on June 27, 2025.

The changes in share capital, authorized and conditional capital are summarized below:

(in thousands of EUR)	Share capital	Authorized capital2024/I	Conditional capital2011/I
Jan. 1, 2025	52,055	26,027	3,491
Changes due to Annual Shareholders' Meeting resolutions	—	—	(3,491)
Dec. 31, 2025	52,055	26,027	—

Capital reserve

The capital reserve includes premium payments from the issuance of shares, as well as additional contributions to the company's equity associated with the exercise of stock options. Additionally, the capital reserve contains the correspondent accumulated compensation expenses related to equity-settled stock option rights issued amounting to EUR 31,278 thousand (prior year: EUR 29,818 thousand).

Accumulated deficit including net income (loss)

Accumulated deficit including net income (loss) includes the consolidated net income (loss) for the financial year as well as earnings generated in previous periods, insofar as these were not distributed or transferred or offset as part of profit and loss transfer agreements.

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income (loss) is used to record exchange differences arising from the translation of the financial statements of foreign operations. In addition, the result from remeasurement of defined benefit obligations is included in this line item.

The development of accumulated other comprehensive income is as follows:

(in thousands of EUR)	Remeasurement ofdefined benefitplans	Exchangedifferences ontranslation offoreign operations
Jan. 1, 2024	(1,127)	(728)
Addition/release from remeasurement	(429)	—
Tax effect	37	—
Currency translation differences	—	6,022
Dec. 31, 2024	(1,519)	5,294
Addition/release from remeasurement	2,328	—
Tax effect	(31)	—
Currency translation differences	—	(11,579)
Dec. 31, 2025	778	(6,285)

In 2025 and 2024 no items were reclassified (recycled) from comprehensive income to profit or loss.

Changes in stockholders' equity are summarized in the consolidated statement of changes in stockholders' equity.

Voting rights

According to section 33 paragraph 1 and 2, section 38 paragraph 1 and section 40 of the German Securities Trading Law (Wertpapier-Handelsgesetz, WpHG) the company published the following information on the Adtran Networks homepage. The table shows the shares of voting rights in Adtran Networks SE that were notified to Adtran Networks SE as of the balance sheet date. The information refers to the most recent notification of a reporting party to Adtran Networks SE. The information regarding the percentage shareholding and voting rights may be outdated.

Date of changein investment	Name of investment owner	Threshold limit	Share ofvoting rights
Mar. 6, 2026	JPMorgan Chase & Co., Wilmington, Delaware, USA	above 5%	5.29 %
Mar. 14, 2025	The Goldman Sachs Group, Inc., Wilmington, Delaware, USA	below 5%	4.21 %
Feb. 2, 2024	UBS Group AG, Zürich, Switzerland	above 3%	3.05 %
Jan. 24, 2024	Morgan Stanley, Wilmington, Delaware, USA	below 3 %	2.97 %
Jan. 8, 2024	Raphael Kain	above 10 %	10.27 %
Nov. 28, 2023	Samson Rock Capital LLP, London, UK	above 10 %	10.02 %
Nov. 28, 2023	Samson Rock Event Driven Fund Limited, Grand Cayman, Cayman Islands	above 10 %	10.02 %
Oct. 26, 2023	John Adis	above 3%	3.19 %
Jul. 21, 2022	Janus Henderson Group Plc, St. Helier, Jersey, USA	below 3 %	1.61 %
Jul. 15, 2022	Dimensional Holdings Inc., Austin, Texas, USA	below 3 %	0.00 %
Jul. 15, 2022	DNB Asset Management AS, Oslo, Norway	below 3 %	0.00 %
Jul. 15, 2022	EGORA Ventures AG, Planegg, Germany	below 3 %	0.00 %
Jul. 15, 2022	Adtran Holdings, Inc., Wilmington, Delaware, USA	above 50 %	65.43 %
Jan. 26, 2022	Bank of America Corporation, Wilmington, Delaware, USA	above 3 %	3.66 %
Jan. 21, 2022	DWS Investment GmbH, Frankfurt, Germany	below 3 %	2.80 %
Jul. 19, 2021	Highclere International Investors Smaller Companies Fund, Westport, USA	below 3 %	2.80 %
Jun. 18, 2021	Teleios Global Opportunities Master Fund, Ltd.,Grand Cayman, Cayman Islands	below 3 %	2.95 %
Jul. 20, 2020	DNB Asset Management S.A., Luxembourg, Luxembourg	below 3 %	2.99 %
Sep. 23, 2019	Duke University, Durham, North Carolina, USA	below 3 %	0.00 %
Jan. 17, 2019	Internationale Kapitalanlagegesellschaft mit beschränkter Haftung,Düsseldorf, Germany	below 3 %	2.86 %
May 2, 2017	Finanzministerium im Auftrag des norwegischen Staates, Oslo, Norway	above 3 %	3.19 %
Feb. 20, 2017	Deutsche Asset Management Investment GmbH, Frankfurt, Germany	below 3 %	2.95 %

Notes to the consolidated income statement

(22) Revenues

In 2025 and 2024, revenues included EUR 105,721 thousand and EUR 101,918 thousand for services, respectively, such as network development services and maintenance services. The remaining revenues relate mainly to product sales.

In 2025, revenues amounting to EUR 406,123 thousand thousand (prior year: EUR 360,107 thousand) relate to performance obligations that were performed at a specific point in time. These include both product sales and network development services. In addition, revenues of EUR 75,624 thousand (prior year: EUR 77,978 thousand) were generated from performance obligations that are rendered over a certain period of time. These mainly relate to maintenance services.

A segmentation of revenues by geographic region is provided in the section on segment reporting under note (32). Information on the usual terms of payment is presented in note (9).

(23) Selling and marketing, general and administration and research and development expenses

Selling and marketing, general and administration and research and development expenses mainly include personnel expenses relating to wages and salaries and social security costs.

In addition, general and administration expenses include expenses for external services provided for legal, accounting and tax purposes as well as expenses regarding leased cars.

Research and development expenses additionally include external service expenses mainly for research and development services, calibration and certification and legal fees as well as depreciation expenses for equipment and cost of material used for research and development.

The increase in operating expenses results in particular from higher personnel expenses due to addition of headcount.

(24) Other operating income and expenses

Other operating income and expenses are as follows:

(in thousands of EUR)	2025	2024
Other operating income
Government grants received	9,603	8,538
Release of provisions	207	—
Income from the provision of services to Adtran Holdings, Inc. and its subsidiaries	15,321	10,470
Income from royalties	1,129	—
Other	507	679
Total other operating income	26,767	19,688
Other operating expenses
Impairment of goodwill	—	(17,371)
Derecognition of trade accounts receivable	(199)	(943)
Expenses from transactions with suppliers	(442)	—
Other	(230)	(299)

Other	(230)	(299)
Total other operating expenses	(871)	(18,613)
Other operating income and expenses, net	25,897	1,076

The increase in government grants in 2025 is mainly due to higher utilization of funding volumes, while the increase in income from the provision of services to Adtran Holdings, Inc. and its subsidiaries is mainly due to new service contracts for research and development activities.

Income from royalties in 2025 relate to the development of a digital signal processor in collaboration with a partner company.

In 2025, the release of provisions mainly relates to settlement of legal disputes recognized in business combinations of previous years.

Details on impairment of goodwill are included in note (13).

(25) Interest income and expenses

Interest income primarily includes interest from daily bank deposits and from other short-term deposits with maturities between one day and three months.

Interest expenses are primarily incurred on financial liabilities. In addition, net interest expenses from valuation of defined benefit plans and interest expenses related to leases according to IFRS 16 are included. The decrease in interest expenses is in particular due to the full repayment of the bank loan in 2025. For further details, refer to notes (9), (14), (15), (16), (18) and (33).

(26) Other financial gains and losses

Other financial gains and losses, net, comprise the following:

(in thousands of EUR)	2025	2024
Foreign currency exchange gains	14,452	12,708
Thereof: gains from forward rate agreements	96	1,326
Foreign currency exchange losses	(14,045)	(13,986)
Thereof: losses from forward rate agreements	(1,376)	(636)
Total other financial gains and losses, net	407	(1,278)

Further information on the foreign currency derivatives is contained in note (33).

(27) Income tax

Income taxes in Germany consist of corporate income tax, the solidarity surcharge and trade taxes. The tax calculation in foreign countries is based on the applicable local tax rates. They vary between 5.00 % and 34.00 % (prior year: between 11.41 % and 34.00 %).

The table below shows the components of the group's total income tax expenses:

(in thousands of EUR)	2025	2024
Current taxes
Current income tax charge	(3,893)	(5,820)
Tax income from previous years	(849)	220
Total current taxes	(4,742)	(5,600)
Deferred taxes
Temporary differences, tax loss carry-forwards and tax credits	(3,689)	(10,152)
Changes in tax rates	(345)	(72)
Total deferred taxes	(4,034)	(10,224)
Income tax benefit (expense), net	(8,776)	(15,824)

A reconciliation of income taxes based on the accounting profit (loss) and the expected domestic income tax rate for the parent company of 29.050 % (prior year: 29.003 %) to effective income tax benefit (expense), net, is presented below:

(in thousands of EUR)	2025	2024
Accounting income before tax	(13,107)	(46,877)
Expected statutory tax benefit (expense)	3,808	13,591
Tax rate adjustments	(345)	(72)
Tax for prior periods	(849)	220
Foreign tax rate differential	1,114	274
Change in non-tax-deductible stock option expenses	424	523
Effects from foreign branch offices	(900)	(666)
Non-tax-deductible expenses incl. interest cap	(988)	(1,139)
Permanent differences (impairment goodwill)	—	(3,275)
Adjustment of deferred taxes on temporary differences on loss carryforwards and from tax credits	(11,125)	(24,525)
Other differences	85	(755)
Income tax benefit (expense), net	(8,776)	(15,824)
Effective tax rate	(66.95) %	(33.76) %

The effect from the change in the valuation allowance for deferred taxes on temporary differences, loss carryforwards and from tax credits primarily concerns Adtran Networks SE and mainly relates to the non-recognition of deferred tax assets on loss carryforwards for the current year amounting to EUR 7,536 thousand (prior year: EUR 15,582 thousand), as well as the change in the valuation allowance for deferred taxes on loss carryforwards and temporary differences from previous year amounting to EUR 4,327 thousand (prior year: EUR 7,252 thousand).

Deferred taxes are based on temporary differences arising from valuation differences and tax loss carryforwards. Deferred taxes are calculated using the tax rates applicable at the time the differences respectively the tax losses are expected to be reversed. Due to the gradual reduction in the corporate income tax rate from 15 % to 10 % in the assessment years 2028 to 2032, tax rates between 29.05 % (for years up to 2027) and 23.77 % (for reduction in assessment years from 2032) have been used for the German entities. The revaluation resulted in deferred tax expense of EUR 342 thousand.

The composition of deferred tax assets and liabilities is presented below:

	Dec. 31, 2025		Dec. 31, 2024
(in thousands of EUR)	Deferred taxassets	Deferred taxliabilities	Deferred taxassets	Deferred taxliabilities
Current assets
Trade accounts receivable	12	(141)	248	(11)
Inventories	726	(2,473)	449	(2,607)
Other current assets	104	(3,251)	—	(5,048)
Total current assets	842	(5,865)	697	(7,666)
Non-current assets
Right-of-use assets	—	(4,432)	—	(4,918)
Property, plant and equipment	133	(642)	277	(767)
Goodwill	1,853	(1,549)	2,914	(1,890)
Capitalized development projects	—	(27,578)	—	(29,570)
Intangible assets acquired in business combinations	2,499	(188)	—	—
Other intangible assets	—	(4,779)	2,777	(6,096)
Other non-current assets	364	(2,585)	4	(3,136)
Total non-current assets	4,849	(41,753)	5,972	(46,377)

	Dec. 31, 2025		Dec. 31, 2024
(in thousands of EUR)	Deferred taxassets	Deferred taxliabilities	Deferred taxassets	Deferred taxliabilities
Current liabilities
Lease Liabilities	1,044	—	1,084	—
Trade accounts payable	3	(92)	335	(114)
Provisions	393	—	2,784	—
Deferred revenues	2,155	—	1,333	(234)
Other current liabilities	2,853	(122)	4,708	—
Total current liabilities	6,448	(214)	10,244	(348)
Non-current liabilities
Lease Liabilities	4,129	—	4,561	—
Other non-current liabilities	2,858	(10)	4,128	(233)
Total non-current liabilities	6,987	(10)	8,689	(233)
Tax loss carry-forwards and tax credits	30,749	—	36,652	—
Total deferred tax assets and liabilities	49,875	(47,842)	62,254	(54,624)
Netting	(36,831)	36,831	(42,564)	42,564
Deferred tax net	13,044	(11,011)	19,690	(12,060)

The temporary differences arise from timing differences between the IFRS assets and IFRS liabilities and their respective tax bases.

No deferred tax assets were recognized for tax loss carryforwards for CIT in the amount of EUR 189,140 thousand (adjusted prior year amount: EUR 144,284 thousand) and for TT in the amount of EUR 181,898 thousand (adjusted prior year amount: EUR 141,115 thousand).

Furthermore, no deferred tax assets were recognized on interest carryforwards amounting to EUR 5,078 thousand (prior year EUR 3,657 thousand) and on temporary differences amounting to EUR 2,432 thousand (prior year EUR 0).

Deferred taxes for pensions and similar obligations, which are directly recognized in the accumulated other comprehensive income, amount to EUR 195 thousand (previous year: EUR 226 thousand).

The group falls within the scope of the OECD "Pillar Two" regulations. The Pillar Two legislation was enacted in Germany and has been in effect since January 1, 2024. The group is currently applying the exemption for accounting for deferred taxes related to Pillar Two income taxes, which was the subject of the amendment to IAS 12 published in May 2023.

No Pillar Two tax was incurred in 2025.

(28) Employees and personnel expenses

In 2025 and 2024, respectively, the Adtran Networks group had an average of 2,139 and 2,047 permanent employees and an average of 35 and 41 apprentices on its payroll, respectively in the following departments:

	Dec. 31, 2025	Dec. 31, 2024
Purchasing and Operations	431	410
Sales and Marketing	300	312
General and Administration	180	177
Research and Development	1,228	1,148
Apprentices	35	41
	2,174	2,088

Personnel expenses for 2025 and 2024 totaled EUR 212,509 thousand and EUR 208,286 thousand, respectively:

(in thousands of EUR)	2025	2024
Wages and salaries	172,128	171,327
Social security costs	23,342	20,731
Expenses for post-employment benefits	12,942	10,278
Anniversary expenses	932	—
Share-based compensation expenses	3,165	5,949
	212,509	208,286

Expenses for retirement benefits include expenses related to defined contribution plans as well as service costs for defined obligation plans.

Further details on expenses for post-employment benefits are included in note (18).

Details regarding share-based compensation expenses are shown in note (39).

(29) Restructuring expenses

In 2025, no restructuring expenses have been recognized as the restructuring programs have ended prior to 2025 (2024: EUR 7,014 thousand, mainly related to severance agreements with employees).

Other disclosures

(30) Consolidated cash flow statement

The consolidated cash flow statement has been prepared in accordance with IAS 7.

Cash flows from investing and financing activities are determined directly, whereas the cash flow from operating activities is derived indirectly from the consolidated income before tax. When cash flow from operating activities is calculated, the changes in assets and liabilities are adjusted for the effects of currency translation. As a result, it is not possible to reconcile the figures to the differences in the published consolidated statement of financial position.

The cash flow from investing activities includes the increase in the balance from the purchase of receivables from Adtran, Inc. from factoring. Cash inflows and outflows are shown net due to the high turnover rate.

The movements of liabilities from financing activities are as follows:

(in thousands of EUR)	Lease liabilities	Liabilities to banks	Financial liabilities toAdtran Holdings, Inc.	Total liabilities fromfinancing activities
Jan. 1, 2024	30,828	13,286	52,773	96,887
Borrowings/(repayments)	(5,551)	52,381	(53,034)	(6,204)
Non-cash changes	2,929	—	—	2,929
Foreign currency exchange effects	594	2,753	261	3,608
Dec. 31, 2024	28,800	68,420	—	97,220
Borrowings/(repayments)	(5,976)	(45,420)	—	(51,396)
Non-cash changes	4,430	—	—	4,430
Foreign currency exchange effects	(729)	(4,549)	—	(5,278)
Dec. 31, 2025	26,525	18,451	—	44,976

Actual interest payments for liabilities to banks amounting to EUR 2,945 thousand (prior year: EUR 3,565 thousand), interest related to lease liabilities of EUR 1,501 thousand (prior year: EUR 1,393 thousand) and no interest payments for financial liabilities to Adtran Holdings, Inc. (previous year: EUR 848 thousand) are included in cash flow from financing activities. The development of liabilities to banks include a liability from factoring. Incoming and outgoing payments related to the factoring agreement are shown net due to the high turnover rate.

Non-cash changes include effective interest rate changes on liabilities to banks as well as non-cash effective increases or decreases in lease liabilities due to consideration of new lease contracts or disposal of lease contracts.

Cash and cash equivalents to which the group only has restricted access are explained in note (8).

(31) Earnings per share

In accordance with IAS 33, basic earnings per share are calculated by dividing consolidated net income by the weighted average number of shares outstanding.

There were no dilution effects in the current fiscal year. Diluted earnings per share are calculated by adjusting the weighted average number of shares outstanding by the number of potential shares arising from granted and exercisable stock options on the balance sheet date.

No effects of dilution had to be considered in net income in 2025 and 2024 according to IAS 33.33.

The following table reflects the number of shares used in the computation of basic and diluted earnings per share:

	2025	2024
Net loss / income entitled to the owners of the parent company in thousands EUR	(21,883)	(62,701)
Weighted average number of shares (basic)	52,054,500	52,054,500
Effect of dilution from stock options	—	—
Weighted average number of shares (diluted)	52,054,500	52,054,500
Earnings per share in EUR basic	(0.42)	(1.20)
Earnings per share in EUR diluted	(0.42)	(1.20)

There have been no other material transactions involving ordinary shares or potential shares between the balance sheet date and the date of authorization for issue of these financial statements. The holders of the ordinary shares (with the exception of Adtran Holdings, Inc. as the majority shareholder) are entitled to an annual compensation payment (EUR 0.52 net) to be made by Adtran Holdings, Inc. under the existing domination and profit and loss transfer agreement. Moreover, under the existing control and profit and loss transfer agreement, the holders of the ordinary shares continue to have the right to sell the shares to Adtran Holdings, Inc. for a cash settlement price of EUR 17.21.

(32) Segment reporting

In accordance with IFRS 8, operating segments are identified based on the way information is reported internally to the chief operating decision maker, i.e. the management board, and regularly reviewed to make decisions about resources to be assigned to the segment and assess its performance. The internal organizational and management structure and the structure of internal financial reporting activities are the key factors in determining what information is reported. For making decisions about resource allocation and performance assessment, management does not review the operating results of individual companies or on the level of business units. Therefore the reporting on individual business segment does not apply.

Within the Adtran Networks group, management decisions are based on pro forma EBIT margin. Pro forma EBIT is calculated prior to non-cash charges related to the stock compensation programs as well as amortization and impairment of goodwill and acquisition-related intangible assets. Expenses related to anniversary payment obligations are excluded starting from 2025. Additionally, non-recurring expenses related to M&A, integration, professional fees relating to an internal investigation and other non-recurring personnel expenses as well as expenses related to restructuring measures are not included. Income from capitalization of development expenses is shown as a separate line item and not deducted from research and development expenses.

Reconciliation of key performance measures to the consolidated financial income on December 31, 2025 presents as follows:

(in thousands of EUR)	Pro formafinancialinformation	Intangibleassets fromacquisitions	Goodwill	Compensationexpenses andexpensesrelated toanniversarypayments	Expenses relatedto to M&A,integration,restructuringmeasures andother nonrecurringexpenses	Disclosureof R&Dexpenses	Consolidatedfinancialinformation
Revenues	481,747	—	—	—	—	—	481,747
Cost of goods sold	(316,299)	—	—	(835)	(64)	—	(317,198)
Gross profit	165,448	—	—	(835)	(64)	—	164,550
Gross margin	34.3 %						34.2 %
Selling and marketingexpenses	(57,264)	(1,277)	—	(863)	(83)	—	(59,488)
General and administrativeexpenses	(31,548)	—		58	(799)	—	(32,289)
Research and developmentexpenses	(146,747)	—	—	(2,456)	(667)	40,048	(109,823)
Income from capitalization ofdevelopment expenses	40,048	—	—	—	—	(40,048)	—
Other operating income	26,554	—	—	—	213	—	26,767
Other operating expenses	(871)	—		—	—	—	(871)
Operating income	(4,380)	(1,277)	—	(4,097)	(1,400)	—	(11,153)
EBIT margin	(0.9) %						(2.3) %
Segment assets	569,048	2,408	45,328	—	—	—	616,784

Reconciliation of key performance measures to the consolidated financial income on December 31, 2024 presents as follows:

(in thousands of EUR)	Pro formafinancialinformation	Intangibleassets fromacquisitions	Goodwill	Compensationexpenses	Expenses relatedto to M&A,integration,restructuringmeasures andother nonrecurringexpenses	Disclosureof R&Dexpenses	Consolidatedfinancial -information
Revenues	438,085	—	—	—	—	—	438,085
Cost of goods sold	(280,391)	—	—	(727)	(1,139)	—	(282,257)
Gross profit	157,694	—	—	(727)	(1,139)	—	155,828
Gross margin	36.0 %						35.6 %
Selling and marketingexpenses	(55,615)	(1,361)	—	(913)	(1,680)	—	(59,569)
General andadministrative expenses	(29,040)	—		(1,851)	(1,022)	—	(31,913)
Research anddevelopment expenses	(138,436)	—	—	(2,458)	(3,755)	36,615	(108,034)
Income fromcapitalization ofdevelopment expenses	36,615	—	—	—	—	(36,615)	—
Other operating income	19,688	—	—	—	—	—	19,688
Other operatingexpenses	(1,103)	—	(17,371)	—	(139)	—	(18,612)
Operating income	(10,197)	(1,361)	(17,371)	(5,949)	(7,735)	—	(42,612)
EBIT margin	(2.3) %						(9.7) %
Segment assets	615,661	4,135	50,206	—	—	—	670,002

Additional information by geographical regions:

(in thousands of EUR)	2025	2024
Revenues
Germany	69,525	62,478
Rest of Europe, Middle East and Africa	198,067	168,272
thereof United Kingdom	79,557	82,270
Americas	165,899	153,911
thereof USA	156,502	146,536
Asia-Pacific	48,256	53,424
	481,747	438,085

(in thousands of EUR)	Dec. 31, 2025	Dec. 31, 2024
Non-current assets
Germany	175,476	166,061
Rest of Europe, Middle East and Africa	18,740	21,884
Americas	9,558	12,826
Asia-Pacific	3,870	2,920
	207,644	203,691

In 2025, revenues with one major customer exceeded 10 % of total revenues (2024: one major customer). In 2025, the share of revenues allocated to the major customer was EUR 65,459 thousand (prior year: EUR 60,549 thousand).

Non-current assets including finance lease equipment, property, plant and equipment and intangible assets except goodwill are attributed based on the location of the respective group company.

(33) Financial instruments

The following tables analyze carrying amounts and fair values according to measurement categories. Only assets and liabilities, which fall into the categories defined by IFRS 7, are presented, so that the total amounts disclosed do not correspond to the balance sheet totals of each year.

				Categories recognized according to IFRS 9
(in thousands of EUR, on Dec. 31, 2025)	Measurement category inaccordance with IFRS 9	Carrying amount	Amortized cost or nocategory, respectively	Fair value recognized inprofit and loss	Fair value	Hierarchy of fair values
Assets
Cash and cash equivalents	AC	43,634	43,634	—	n/a*	n/a*
Trade accounts receivable without underlying factoring agreement	AC	112,755	112,755	—	n/a*	n/a*
Trade accounts receivable with underlying factoring agreement	FVTPL	—	—	—	—	Level 2
Receivables from Adtran Holdings, Inc. due to loss absorption	AC	23,783	23,783	—	n/a	n/a
Loans granted	AC	15,352	15,352	—	15,352	n/a
Other current financial assets	AC	27,379	27,379	—	n/a	n/a*
Other non-current financial assets	AC	11,529	11,529	—	11,529	Level 2
Total financial assets		234,433	234,432	—	26,881
Liabilities
Current lease liabilities	n/a	5,557	5,557	—	n/a	n/a
Non-current lease liabilities	n/a	20,968	20,968	—	n/a	n/a
Current liabilities to banks	FLAC	18,451	18,451	—	18,451	Level 2
Non-current liabilities to banks	FLAC	—	—	—	—	Level 2
Trade accounts payable	FLAC	45,184	45,184	—	n/a*	n/a*
Other current financial liabilities	FLAC	8,925	8,925	—	n/a*	n/a*
Other non-current financial liabilities	FLAC	4,609	4,609	—	4,609	Level 2
Total financial liabilities		103,693	103,693	—	23,060

* Due to the short-term nature, it was assumed that the book value as of the reporting date approximates the fair value.

			Amounts recognized according to IFRS 9
(in thousands of EUR, on Dec. 31, 2024)	Measurement category inaccordance with IFRS 9	Carrying amount	Amortized cost or nocategory, respectively	Fair value recognized inprofit and loss	Fair value	Hierarchy of fair values
Assets
Cash and cash equivalents	AC	27,040	27,040	—	n/a	n/a*
Trade accounts receivable without underlying factoring agreement	AC	108,575	108,575	—	n/a	n/a*
Trade accounts receivable with underlying factoring agreement	FVTPL	—	—	—	—	Level 2
Receivables from Adtran Holdings, Inc. due to loss absorption	AC	47,103	47,103	—	n/a	n/a
Loans granted	AC	16,429	16,429	—	16,429	n/a
Other current financial assets	AC	37,383	37,383	—	n/a	n/a*
Other non-current financial assets	AC	17,120	17,120	—	17,120	Level 2
Derivatives	FVTPL	545	—	545	545	Level 2
Total financial assets		254,195	253,650	545	34,094
Liabilities
Current lease liabilities	n/a	6,047	6,047	—	n/a	n/a
Non-current lease liabilities	n/a	22,753	22,753	—	n/a	n/a
Current liabilities to banks	FLAC	19,036	19,036	—	19,036	Level 2
Non-current liabilities to banks	FLAC	46,917	46,917	—	46,917	Level 2
Non-current financial liabilities to Adtran Holdings, Inc.	FLAC	—	—	—	—	Level 2
Trade accounts payable	FLAC	48,578	48,578	—	n/a*	n/a*
Other current financial liabilities	FLAC	3,472	3,472	—	n/a*	n/a*
Other non-current financial liabilities	FLAC	579	579	—	579	Level 2
Derivatives	FVTPL	—	—	—	—	Level 2
Total financial liabilities		147,382	147,382	—	66,532

* Due to the short-term nature, it was assumed that the book value as of the reporting date approximates the fair value.

The group uses the following hierarchy for determining the fair value of financial instruments:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: Techniques, which use inputs that are not based on observable market data.

At the end of the reporting period it is analyzed whether transfers between the hierarchy levels need to be considered. In 2025 and 2024, there were no such transfers.

In the case of cash and cash equivalents, trade receivables measured at amortized cost, other current financial assets and liabilities as well as trade accounts payable, the carrying amounts represent reasonable approximations for the fair values.

Forward rate agreements are measured using the discounted cash flow method based on quoted forward rates and yield curves derived from quoted interest rates according to the maturities of the contract. At the end of 2025, there were no outstanding forward rated agreements.

The fair values of financial liabilities as well as other non-current financial assets and liabilities have been calculated based on future cash flows by using arm's length, risk-adjusted interest rates.

The fair value of the balance sheet items measured at Level 3 on December 31, 2025 totaled nil (December 31, 2024: in total nil).

The following table shows the net results per measurement category according to IFRS 9:

(in thousands of EUR)	Note	2025	2024
Financial assets measured at amortized cost	(12)	1,718	2,190
Financial liabilities measured at amortized cost	(16)	(2,805)	(4,563)
Financial assets and liabilities measured at fair value through profit orloss	(25)	(1,280)	690
Net result		(2,367)	(1,683)

In 2025 and 2024, the net result from financial assets measured at amortized cost included the impairment loss and interest income recognized in the current period on the relevant assets. The net result of financial instruments at fair value through profit or loss includes the changes in the fair value of derivative financial instruments. The net result from financial liabilities at amortized cost includes interest for bank liabilities (drawn and undrawn) and other financial liabilities as well as amortization according to effective interest method.

Total interest income and expenses from financial assets and liabilities are as follows:

(in thousands of EUR)	2025	2024
Financial assets measured at amortized cost
Total interest income	2,094	2,119
Financial liabilities measured at amortized cost
Total interest expense	(2,805)	(4,563)

As the necessary prerequisites have not been fulfilled, no financial assets and liabilities are offset in the balance sheet. Master netting agreements exist with the contractual partners of the derivatives, according to which a set-off can be made in the event of insolvency. As of the balance sheet date, there were only insignificant offsetting potentials from derivative financial instruments.

(34) Financial risk management

The following section describes the group's position with regard to risks arising from financial instruments and their potential future impact on the net assets, financial position and operational results. The classification into material and immaterial financial risks considered in the risk and opportunity report has been disregarded.

Adtran Networks' capital management is described in note (35).

The management board establishes principles for overall risk management and decides on the use of derivative financial instruments and the investment of excess liquidity. The compliance department is responsible for group-wide monitoring of observance of the processes and guidelines of the risk management system defined by the Adtran Networks management board.

Foreign currency risks

Risk exposure

Adtran Networks is exposed to foreign currency risks as investments, financing, and operations are carried out in several currencies. This results in foreign currency risks from future transactions as well as from recognized assets and liabilities denominated in a currency other than the functional currency of the respective group company. As part of the reporting date analysis of balance sheet exposures and exchange rate sensitivities, the currency pairs EUR/USD and EUR/GBP were identified as relevant.The relevance of the different currencies can vary depending on the reporting date.

The foreign currency risk of Adtran Networks on the basis of the underlying operating activities at the end of 2025 in the major currencies is as follows:

(in thousands)	USD	GBP
Trade accounts receivable	32,664	1,489
Trade accounts payable	(20,417)	—

At the end of 2024, the foreign currency risk was as follows:

(in thousands)	USD	GBP
Trade accounts receivable	17,779	212
Trade accounts payable	(18,878)	(117)

The group's risk with regard to other currency fluctuations was insignificant at the reporting date.

Risk management

Adtran Networks' risk management framework considers operational business risks to the business that affect the income statement. Specific hedging transactions are only concluded if larger non-recurring foreign exchange risks are expected (e.g. due to a planned M&A transaction). Regarding intercompany payments, the treasury department is closely involved in order to optimize the cash flows with regard to currencies and separate hedging considerations. Foreign currency risks from recognized financial assets and liabilities are only considered by Adtran Networks' risk management in specific cases.

In 2024 and 2025, the group recorded significant external net cash inflows in GBP and significant external net cash outflows in USD. To hedge exchange rate risks from future cash flows the group entered into derivatives in prior periods. As of December 31, 2025, the fair value of foreign exchange agreements outstanding was zero as there were no outstanding derivatives (December 31, 2024: positive EUR 545 thousand and negative EUR 0 thousand, respectively).

Sensitivity analysis

The foreign exchange rate sensitivity of the most relevant currency pairs with respect to balance sheet risks on earnings after tax at the end of the reporting period is illustrated below. The analysis does not consider effects from the translation of the financial statements of the group's foreign subsidiaries into euro the company's reporting currency.

If, at the balance sheet date 2025, the relevant exchange rates would have appreciated or depreciated by 10 % relative to the base currency in the relevant currency relations (base currency/spot currency), the following impact on earnings after tax from the currency translation of reported primary financial instruments would have to be considered:

(in thousands of EUR)		Dec. 31, 2025
	+10 %	-10 %
EUR/USD	1,038	(1,269)
EUR/PLN	(663)	810
EUR/GBP	(558)	682
USD/PLN	(399)	488

In the previous year, the following sensitivities were reported for the currency relations relevant in 2024:

(in thousands of EUR)		Dec. 31, 2024
	+10 %	-10 %
EUR/USD	1,945	(2,377)
EUR/PLN	(357)	437
EUR/GBP	(882)	1,078
EUR/ILS	(208)	254

In addition, the currency pairs USD/GBP and USD/EUR were hedged by using forward contracts in 2024 and at the beginning of 2025. There were no outstanding forward contracts at year end 2025.

The following sensitivities have been reported in 2024:

(in thousands of EUR)		Dec. 31, 2024
	GBP +10 %	GBP -10 %
USD/GBP	(1,343)	1,815
	EUR +10 %	EUR -10 %
USD/EUR	(352)	564

Interest rate risk

Risk exposure

The interest rate risk is the risk that fair values or future interest payments on existing and future interest-bearing financial instruments will fluctuate due to changes in market interest rates. Adtran Networks increased its cash position from EUR 27,040 thousand in 2024 to EUR 43,634 thousand in 2025.

On June 4, 2024, Adtran Networks as additional borrower entered into a loan agreement (Senior Secured Credit Facility) of Adtran Holdings, Inc. with Wells Fargo Bank and other lenders. This 6th amendment to the previously existing agreement allows for a USD 50,000 thousand subline available for borrowings by Adtran Networks SE (the "subline").

At year-end 2025, Adtran Networks SE had no outstanding loans with banks (prior year-end USD 49,000 thousand (EUR 46,917 thousand)).

Further information on existing financial liabilities and financial covenants can be found in note (16) and note (35).

Risk management

The treasury department regularly analyzes the existing interest rate risk and, in the event of a material risk, makes proposals for the use of appropriate hedging instruments. As part of risk management to limit interest rate risks, derivative financial instruments such as interest rate caps and interest rate swaps can be used. Loans drawn under the revolving credit facility with Wells Fargo bear interest at Term SOFR plus a margin of 5.15 %.

Sensitivity analysis

No sensitivity analysis was performed as Adtran Networks does not report any debt balances that are subject to variable interest rates.

Default risk

Risk exposure

The default risk arising from financial assets involves the risk of the default of a contractual partner and thus includes at maximum the amount of the related recognized carrying amounts. At Adtran Networks default risks arise from cash at banks, contract assets and contractual cash flows from debt instruments that are measured at amortized cost or at fair value through profit or loss, including outstanding trade receivables.

Risk management

All default risks are managed at group level. The default risk is mitigated by various measures, depending on the class of financial assets. In addition, the credit risk from non-derivative financial assets is considered by means of risk provisioning and bad debt allowances.

Adtran Networks enters into transactions with creditworthy banks and financial institutions. To assess the creditworthiness of banks, financial institutions and other financial assets, Adtran Networks uses current credit ratings from rating agencies (S&P, Moody's or Fitch) as well as current default rates (credit default swaps). Based on the capital market ratings, Adtran Networks divided the banks and other financial assets into three internal rating classes, determining their exposure at default and calculating the expected loss at default as of December 31, 2025 and 2024. Rating class 1 means investment grade assets, rating class 2 means non-investment grade assets and rating class 3 includes assets in default. Due to immateriality, no risk provisions were recognized at the balance sheet date.

The gross carrying amounts (risk positions) by rating class on December 31, 2025 are as follows:

(in thousands of EUR)	Ratingclass 1	Ratingclass 2	Ratingclass 3	Total
Cash and cash equivalents	43,634	—	—	43,634
Receivables from Adtran Holdings, Inc. due to loss absorption	—	23,783	—	23,783
Other current financial assets	27,379	—	—	27,379
Loans granted	—	15,352	—	15,352
Other non-current financial assets	11,529	—	—	11,529

The gross carrying amounts (risk positions) by rating class on December 31, 2024 were as follows:

(in thousands of EUR)	Ratingclass 1	Ratingclass 2	Ratingclass 3	Total
Cash and cash equivalents	27,040	—	—	27,040
Receivables from Adtran Holdings, Inc. due to loss absorption	—	47,103	—	47,103
Other current financial assets	37,383	—	—	37,383
Loans granted	—	16,429	—	16,429
Other non-current financial assets	17,120	—	—	17,120

Adtran Networks has distributed its investments to more than 10 international credit institutions. As of December 31, 2025, one bank was responsible for approximately 84% of all investments (as of December 31, 2024: for approximately 75 %). This results in a risk exposure of EUR 43,282 thousand. (2024: EUR 26,639 thousand).

When concluding contracts with clients, the creditworthiness and credit quality of the client is assessed on the basis of independent ratings, audited financial statements, or historical experience. Depending on the risk assessment, deliveries are made solely only under reasonable payment terms, which may include down payments or advance payments.

Adtran Networks applies the general expected credit loss model for significant financial assets. To measure the expected credit losses on trade receivables carried at amortized cost and contract assets the simplified approach under IFRS 9 is used. Trade receivables are summarized on the basis of common credit risk characteristics and overdue days.

As of December 31, 2025, and 2024, the expected loss ratios are based on historical payment profiles of receivables and the corresponding historical defaults. There are adjusted to reflect up-to-date and forward-looking information on macroeconomic factors (such as geopolitical events, currency fluctuations, inflation, trade conflicts, state subsidies) that may affect clients solvency. Contract assets relate to work that has not yet been invoiced, and accordingly have the same risk characteristics as trade receivables of the underlying contracts.

In addition, Adtran Networks applies a specified valuation allowance if certain criteria are met. This applies in case of bankruptcy, knowledge of impending insolvency proceedings or if financial assets are overdue more than one year.

Regarding major other financial assets Adtran Networks reviews the risk on a case-by-case basis considering the counterpartyspecific credit default swaps or assumptions regarding the expected creditworthiness of the contractual partners.

The following table shows the overdue structure of gross amounts of trade accounts receivable and contract assets by as of December 31, 2025:

(in thousands of EUR)	Not yet due	Overdue upto 90 days	90 – 180 daysoverdue	180 days to 1year overdue	Creditimpaired	Total
Trade accounts receivable(simplified approach)	88,617	17,630	2,222	1,968	4,996	115,433
Contract assets	162	—	—	—	—	162

As of December 31, 2024, the overdue structure of gross amounts of trade receivables and contract assets were as follows:

(in thousands of EUR)	Not yet due	Overdue upto 90 days	90 – 180 dayoverdue	180 days to 1year overdue	creditimpaired	Total
Trade accounts receivable(simplified approach)	91,327	10,068	2,452	2,419	4,904	111,169
Contract assets	211	—	—	—	—	211

Due to immateriality, no valuation allowances were recognized relating to contract assets as of December 31, 2025, and 2024. The reconciliation of risk provisions for trade receivables is shown in note (9).

For other financial assets carried at amortized cost with a total carrying amount of EUR 38,908 thousand (prior year: EUR 54,503 thousand), as well as for the receivables from Adtran Holdings, Inc. from loss absorption and the loans granted the group analyzes the risk on a case-by-case basis. As of December 31, 2025, and 2024, there were no significant default risks. Therefore, no valuation allowances were recognized.

Liquidity risk

Risk exposure

In general, the inability to meet its financial obligations, such as servicing its debts, composes the liquidity risk of Adtran Networks.

Risk management

Management uses rolling forecasts to monitor the group's liquidity reserves, consisting of cash and cash equivalents based on expected cash flows and unused credit lines. To manage liquidity, Adtran Networks considers compliance with internally defined operating liquidity at all times.

The group's liquidity management policies include the forecast of cash flows in the major currencies and the assessment of required cash in these currencies, the monitoring of balance sheet liquidity ratios and the management of debt financing plans. In general, Adtran Networks pursues a conservative and risk-avoiding strategy.

Financing agreements

On June 4, 2024, Adtran Networks as additional debtor entered into a loan agreement (Senior Secured Credit Facility) of Adtran Holdings, Inc. with Wells Fargo Bank and other lenders. At December 31, 2025, Adtran Networks SE has not drawn any loan out of this agreement. The loan agreement matures on July 18, 2027.

See also note (16) on liabilities to banks and note (35) on capital management.

Maturities of financial liabilities

The table below analyzes the group's undiscounted cash outflows for non-derivative financial liabilities according to their maturity based on the remaining time at the balance sheet date to the contractual maturity date:

		Carrying	Future cash flows
(in thousands of EUR, on Dec. 31, 2025)	Note	value		≤ 12 months13 – 36 months			> 36 months
			Redemption	Interest	Redemption	Interest	Redemption	Interest
Lease liabilities	(15)	26,525	5,557	1,589	11,358	3,249	9,610	2,749
Liabilities to banks	(16)	18,451	18,451	—	—	—	—	—
Trade accounts payable	(17)	45,184	45,184	—	—	—	—	—
Other financial liabilities	(17)	13,534	8,925	—	4,609	—	—	—
		103,695	78,118	1,589	15,967	3,249	9,610	2,749

		Carrying	Future cash flows
(in thousands of EUR, on Dec. 31, 2024)	Note	value	≤ 12 months		13 – 36 months		> 36 months
			Redemption	Interest	Redemption	Interest	Redemption	Interest
Lease liabilities *)	(15)	28,800	6,047	1,521	9,351	2,352	13,402	3,371
Liabilities to banks	(16)	68,420	21,503	—	46,917	10,290	—	—
Trade accounts payable	(17)	48,578	48,578	—	—	—	—	—
Other financial liabilities	(17)	5,192	4,613	—	579	—	—	—
		150,991	80,742	1,521	56,847	12,642	13,402	3,371

*) Prior year information on interest has been adjusted.

As at year end 2025 and 2024, no derivatives outstanding were marked at a negative fair value.

(35) Capital management

Risk management

Adtran Networks' capital management aims to ensure the continued existence of the company and optimization of its capital structure to reduce its cost of capital.

The group defines capital as the sum of equity and financial liabilities. On December 31, 2025, financial debt amounted to EUR 44,975 thousand (prior year: EUR 97,220 thousand). Equity on December 31, 2025, amounted to EUR 387,993 thousand or 62.9 % of the balance sheet total (previous year: EUR 388,166 thousand or 57.9 % of the balance sheet total). Adtran Networks aims for an equity ratio of at least 30 %. The equity ratio was met in the past financial year.

Financial covenants

Aside from customary covenants related to representations and warranties, information requirements, among others, Adtran Holdings Inc. is subject to specific financial covenants which are tested on a group, consolidated basis at the Adtran Holdings, Inc. level.

As of December 31, 2025, Adtran Holdings, Inc. was in full compliance with all applicable covenants. Management expects continued compliance with all loan agreements throughout the term.

Adtran Networks had no outstanding borrowings under its credit facility as of December 31, 2025 (December 31, 2024: USD 49,000 thousand). Under the arrangement, the company retains the ability to draw up to USD 50 million as needed. The facility carries a contractual term expiring on July 18, 2027.

(36) Other financial obligations and financial commitments

On December 31, 2025, the group had purchase commitments totaling EUR 70,593 thousand (on December 31, 2024: EUR 60,385 thousand) in respect to suppliers.

Group entities have issued guarantees in favor of customers. On December 31, 2025, performance bonds and customs bonds with a maximum guaranteed amount of EUR 6,134 thousand were issued (on December 31, 2024: EUR 200 thousand). Based on experience from prior periods, Adtran Networks does not expect claims from these guarantees at year-end 2025.

The Senior Secured Credit Facility described in note (16) requires that Adtran Networks SE's material subsidiaries provide a guarantee solely for the borrowings by Adtran Networks SE ("subline"). In addition, Adtran Networks SE and its material subsidiaries are required to grant security interests in favor of Wells Fargo Bank over their tangible and intangible assets pursuant to applicable security agreements, solely to secure the obligations in respect of the subline, with the exception of the excluded assets, which include any real property ownership and leasehold interests in real property.

(37) Contingent liabilities

In the normal course of business, claims may be asserted, or lawsuits filed against the company and its subsidiaries from time to time. On December 31, 2025, Adtran Networks does not expect potential titles or litigations in detail or in total that will have a material impact on its financial position or operating performance.

(38) Audit fees and other services from auditors

KPMG AG Wirtschaftsprüfungsgesellschaft has been appointed as the auditor of the company and the group in the Shareholders Meeting on June 27, 2025.

In 2025 and 2024, the following fees charged by the legal auditor were recognized as expenses:

(in thousands of EUR)	Fees 2025	Fees 2024
Year-end audit	1,274	1,381
thereof KPMG network companies	—	175
Other assurance services	218	266
Other services	5	—
	1,497	1,647

The audit fees for KPMG AG Wirtschaftsprüfungsgesellschaft are related to the audit of the consolidated financial statements and the annual financial statements, including the combined management report of Adtran Networks SE. Additionally, the annual audit was performed for a German subsidiary.

The other assurance services for the financial year include costs for the assurance of the combined separate non-financial report and other audits based on regulatory requirements.

(39) Share-based payment instruments

Adtran Networks SE stock options

The company has issued stock options for employees (Plan XIV) and for management board (Plan XIVa) in the previous years.

All contracts stipulated a general four-year vesting period and a total contractual life of seven years for the respective rights issue. The rights could only be exercised if the volume weighted average of the company share closing prices on the ten stock exchange trading days before the first day of each exercise period in which the option is exercised is at least 120 % of the purchase price. In addition, options issued to the management board from Plan XIVa included a profit limitation.

All option rights were non-transferable. They could only be exercised as long as the entitled person was employed on a permanent contract by the company or by a company in which Adtran Networks SE has direct or indirect interest. Option rights issued to apprentices could only be exercised if the apprentices were hired by the company or by an affiliated company on a permanent contract. All option rights expired upon termination of the employment contract. In the event that the person entitled dies, becomes unable to work or retires, special provisions came into force.

Subject to the conditions under which option rights were issued, each option right entitled the individual to purchase one common share in the company. The conditions of issue specified the term, the exercise price (strike price), any qualifying periods and the defined exercise periods.

Exercise periods were regularly linked to key business events in the company's calendar and each had a defined term. Certain other business events could lead to blocking periods, during which option rights cannot be exercised. Insofar as regular exercise periods overlapped with such blocking periods, the exercise deadline should be extended by the corresponding number of exercise days immediately after the end of such a blocking period. Option rights could have been exercised only on days on which commercial banks are open in Frankfurt am Main, Germany.

The fair value of stock options was valued using a Monte Carlo simulation. For the calculation of the fair value of options, Adtran Networks assumed that no dividends will be paid to stockholders.

No option rights were issued by Adtran Networks SE in 2025.

Exchange of stock options of Adtran Networks SE

In 2022, in relation to and prior to the final closing of the business combination agreement with Adtran Holdings, Inc. ("Adtran"), Adtran communicated an offer to all Adtran Networks employees to voluntarily convert the held options from all existing Adtran Networks stock options plans into share-based compensation instruments of Adtran 2015 Employee Stock Incentive Plan and 2020 Employee Stock Incentive Plan. The management board committed to convert all outstanding options. The employees could choose for each grant date, if all outstanding options from these grant date will be converted or not. The Adtran Options received in the conversion shall be subject to the terms of the Adtran plan with the following exceptions:

(a) In case of a consent, the outstanding Adtran Networks options (whether vested or unvested) converted into the right to acquire such number of shares in Adtran that is equal to the number of Adtran Networks Options multiplied by 0.8244, rounded down to the nearest whole share (each right to acquire one (1) share in Adtran is one (1) "Adtran Option"). The original exercise price of Adtran Networks was multiplied by 0.8244 and converted with the exchange rate either at the time of the consent letter or on the date of the close of the business combination agreement, depending on which is more favorable to the options holder.

(b) Vesting periods of Adtran options shall continue to be calculated from the date of grant of the converted Adtran Networks options.

(c) The expiration dates of the Adtran Networks options shall continue to be determined by the terms of the Adtran Networks option agreements.

Each exercise may not be made for less than 100 shares or, if less, the total remaining shares subject to the stock option. No special exercise periods exist at Adtran.

Share-based payment instruments of Adtran Holdings, Inc.

In 2024, Adtran granted from 2020 Employee Stock Incentive Plan ("2020 Employee Plan") and 2020 Directors Stock Plan ("2020 Directors Plan") Restricted stock units (RSUs) and Performance stock units (PSUs) to Adtran Networks employees and members of the Adtran Network management board. In May 2024, the new plans 2024 Employee Stock Incentive Plan ("2024 Employee Plan") and 2024 Directors Stock Plan ("2024 Directors Plan") came into effect and replaced the old plans. The basic conditions remain unchanged.

Under the "2024 Employee Plan", Adtran is authorized to issue shares of common stock to certain employees, through incentive stock options and non-qualified stock options, stock appreciation rights, RSUs and restricted stock, any of which may be subject to performance-based conditions. RSUs and restricted stock granted under the "2024 Employee Plan" will typically vest pursuant to a four-year vesting schedule beginning on the first anniversary of the grant date. Stock options granted under the "2024 Employee Plan" will typically become exercisable beginning after one year of continued employment, normally pursuant to a four-year vesting schedule beginning on the first anniversary of the grant date and have a ten-year contractual term.

Under the "2024 Directors Plan", Adtran is authorized to issue shares of common stock through stock options, restricted stock and RSUs to directors. Stock awards issued under the "2024 Directors Plan" typically will become vested in full on the first anniversary of the grant date. Stock options issued under the "2024 Directors Plan" will have a ten-year contractual term.

RSUs are awards of a unit representing one share of common stock of Adtran that upon satisfaction of certain conditions, restrictions and contingencies as determined, including the satisfaction of specified performance measures result in the issuance of one share of common stock of Adtran. The lifetime of these instruments is four years with 25 % of RSUs vesting each year. RSUs are valued at share price at grant date. RSU shall generally be settled in shares of common stock of Adtran immediately following the date they vest. The fair value of RSUs is equal to the closing price of Adtran on the grant date.

For market-based PSUs, the number of shares of common stock earned by a recipient is subject to a market condition based on Adtran's relative total shareholder return against all companies in the NASDAQ Telecommunications Index at the end of a threeyear performance period. Depending on the relative total shareholder return over the performance period, the recipient may

earn from 0 % to 150 % of the shares underlying the PSUs, with the shares earned distributed upon the vesting. The fair value of the award is based on the market price of our common stock on the date of grant, adjusted for the expected outcome of the impact of market conditions using a Monte Carlo Simulation valuation method. A portion of the granted PSUs vests and the underlying shares become deliverable upon the death or disability of the recipient or upon a change of control of Adtran, as defined by the "2024 Employee Plan". The recipients of the PSUs receive dividend credits based on the shares of common stock underlying the PSUs. The dividend credits vest and are earned in the same manner as the PSUs and are paid in cash upon the issuance of common stock for the PSUs.

During 2025 and 2024, Adtran granted performance-based PSUs to its executive officers and certain employees. The grant-date fair value of these performance-based PSUs is based on the closing price of the Adtran's stock on the date of grant. These awards vest over either a two or three-year period, subject to the grantee's continued employment, with the ability to earn shares in a range of 0 % to either 100 % or 150 % of the awarded number of PSUs based on the achievement of defined performance targets.

The following computation parameters apply for RSUs and PSUs issued in 2025 by Adtran:

	Employees		Management board
	RSUs	PSUs	RSUs	AnnualPSUs	3-year planPSUs
Weighted average share price(in USD)	10.31	10.31	10.18	10.15	8.50
Weighted expected volatility(in % per year)	n/a	54.85	n/a	54.99	n/a
Term (in years)	4.00	3.00	4.00	3.00	2.00
Weighted risk-free interest rate(in % per year)	n/a	4.28	n/a	4.24	n/a
Average fair value of RSUs and PSUs (in USD)	10.31	12.52	10.18	12.33	8.50

The volatility is specified as fluctuation of the share price compared to the average share price of the period. In each case, expected volatility is calculated based on historic share prices (historic volatility). The risk-free interest rate is based on information on risk-free investments with corresponding terms. Calculation of fair value was based on the assumption that no dividends would be paid to shareholders.

The valuation assumed that the PSUs vest after the end of the vesting period (early vesting). PSU and RSU programs do not contain an exercise price.

The tables below present changes in the number of outstanding option rights, RSUs and PSUs.

Stock option program XIV of Adtran Networks SE for employees

		Weighted averagestrike price
	Number of options	(in EUR)
Options outstanding on Jan. 1, 2024	17,500	10.00
Granted options	—	—
Exercised options	(17,500)	10.00
Forfeited options	—	—
Expired options	—	—
Options outstanding on Dec. 31, 2024	—	—
Further information	2025	2024
Weighted average remaining contractual life (in years)	n/a	—
Weighted average share price on the date of exercise (in EUR)	n/a	19.93
The strike price for these options (in EUR)	n/a	n/a

Stock options of Adtran Holdings, Inc. for employees

		Weighted average
	Number of options	strike price(in USD)
Options outstanding on Dec. 31, 2023	1,630,054	8.13
Transferred options from Adtran, Inc. *	24,453	10.34
Granted options	—	—
Exercised options	(78,071)	6.10
Forfeited options	(132,693)	7.58
Expired options	(89,682)	8.67
Options outstanding on Dec. 31, 2024	1,354,061	8.50
Granted options	—	—
Exercised options	(157,825)	7.17
Forfeited options	(89,521)	9.36
Expired options	(97,147)	9.53
Options outstanding on Dec. 31, 2025	1,009,568	8.43
Of which exercisable	999,678	8.32
Further information	2025	2024
Weighted average remaining contractual life (in years) on Dec. 31	4.40	4.95
Average fair value of stock options granted (in USD)	—	—
Weighted average share price on the date of exercise (in USD)	10.09	7.96
The strike price for these options is between (in USD)	5,23 - 19,08	5,23 - 19,08

*Options transferred from Adtran, Inc. relate to transfers of employees from Adtran, Inc. to Adtran Networks.

Stock options of Adtran Holdings, Inc. for active and prior management board members

	Number of options	Weighted averagestrike price(in USD)
Options outstanding on Dec. 31, 2023	772,094	13.80
Granted options	—	—
Exercised options	(35,994)	6.06
Forfeited options	(221,647)	11.91
Expired options	—	—
Options outstanding on Dec. 31, 2024	514,453	15.16
Granted options	—	—
Exercised options	—	—
Forfeited options	(124,641)	19.08
Expired options	(94,207)	15.33
Options outstanding on Dec. 31, 2025	295,605	13.45
Of which exercisable	210,222	11.16
Further information	2025	2024
Weighted average remaining contractual life (in years) on Dec. 31	2.06	3.24
Average fair value of stock options granted (in USD)	—	—
Weighted average share price on the date of exercise (in USD)	—	7.01
The strike price for these options is between (in USD)	7,01 - 19,08	7,01 - 19,08

RSUs for the employees

	Number of RSUs
RSUs outstanding on Dec. 31, 2023	153,428
Granted RSUs	277,530
Converted (vested) RSUs	(40,232)
Forfeited RSUs	(19,979)
Expired RSUs	—
RSUs outstanding on Dec. 31, 2024	375,778
Transferred RSUs from Adtran, Inc. *	5,910
Granted RSUs	393,768
Converted (vested) RSUs	(106,169)
Forfeited RSUs	(37,037)
Expired RSUs	—
RSUs outstanding on Dec. 31, 2025	632,250
Of which vested	—
Weighted average remaining contractual life (in years) on Dec. 31, 2025	2.52
Weighted average remaining contractual life (in years) on Dec. 31, 2024	2.60
Average fair value of RSUs granted in the current year (in USD)	10.31
Average fair value of RSUs granted in the prior year (in USD)	6.95
Weighted average share price on the vesting date (in USD) in current year	10.19
Weighted average share price on the vesting date (in USD) in prior year	6.99

*RSUs transferred from Adtran, Inc. relate to transfers of employees from Adtran, Inc. to Adtran Networks.

PSUs for the employees

	Number of PSUs
PSUs outstanding on Dec. 31, 2023	208,534
Transferred PSUs from Adtran, Inc. *)	14,000
Granted PSUs	67,898
Converted (vested) PSUs	—
Forfeited PSUs	(34,000)
Expired PSUs **)	(11,561)
PSUs outstanding on Dec. 31, 2024	244,871
Granted PSUs	14,536
Converted (vested) PSUs	—
Forfeited PSUs	(68,763)
Expired PSUs	(165,776)
PSUs outstanding on Dec. 31, 2025	24,868
Of which vested	—
Weighted average remaining contractual life (in years) on Dec. 31, 2025	1.61
Weighted average remaining contractual life (in years) on Dec. 31, 2024	1.77
Average fair value of PSUs granted in the current year (in USD)	12.52
Average fair value of PSUs granted in the prior year (in USD)	8.29
Weighted average share price on the vesting date (in USD) in current year	—
Weighted average share price on the vesting date (in USD) in prior year	—

*) PSUs transferred from Adtran, Inc. relate to transfers of employees from Adtran, Inc. to Adtran Networks.

**) Prior year information has been adjusted.

RSUs for the management board

	Number of RSUs
RSUs outstanding on Dec. 31, 2023	365,936
Granted RSUs	155,323
Converted (vested) RSUs	(242,290)
Forfeited RSUs	—
Expired RSUs	—
RSUs outstanding on Dec. 31, 2024	278,969
Granted RSUs	210,544
Converted (vested) RSUs	(110,623)
Forfeited RSUs	(30,841)
Expired RSUs	—
RSUs outstanding on Dec. 31, 2025	348,049
Of which vested	—
Weighted average remaining contractual life (in years) on Dec. 31, 2025	2.51
Weighted average remaining contractual life (in years) on Dec. 31, 2024	2.00
Average fair value of RSUs granted in the current year (in USD)	10.18
Average fair value of RSUs granted in the prior year (in USD)	6.95
Weighted average share price on the vesting date (in USD) in current year	9.52
Weighted average share price on the vesting date (in USD) in prior year	6.30

PSUs for the management board

	Number ofannualPSUs	Number of3-year planPSUs	Number ofIntegrationbonusPSUs
PSUs outstanding on Dec. 31, 2023	179,907	192,656	69,933
Granted PSUs	122,834	72,246	—
Converted (vested) PSUs	—	—	(69,933)
Forfeited PSUs	(97,991)	—	—
Expired PSUs	—	—	—
PSUs outstanding on Dec. 31, 2024	204,750	264,902	—
Granted PSUs	170,583	72,246	—
Converted (vested) PSUs	—	—	—
Forfeited PSUs	(38,637)	(60,205)	—
Expired PSUs	—	(276,943)	—
PSUs outstanding on Dec. 31, 2025	336,696	—	—
Of which vested	—	—	—
Weighted average remaining contractual life (in years) on Dec. 31, 2025	1.85	—	—
Weighted average remaining contractual life (in years) on Dec. 31, 2024	1.69	1.00	—
Average fair value of PSUs granted in the current year (in USD)	12.33	8.50	—
Average fair value of PSUs granted in the prior year (in USD)	8.29	5.81	—
Weighted average share price on the vesting date (in USD) in current year	—	—	—
Weighted average share price on the vesting date (in USD) in prior year	—	—	—

On December 31, 2025, all 3-year plan PSUs expired without being earned as the minimum target achievement for Adjusted EBIT was not met during the 3-year performance measurement period. The outstanding 3-year plan PSUs of one former member of the management board forfeited as the employment terminated on December 31, 2025.

Compensation expenses arising from share-based compensation programs included in operating income were as follows:

(in thousands of EUR)	2025	2024
Stock option program XIV of Adtran Networks SE for employees	—	24
Stock options of Adtran Holdings, Inc. for the management board	(244)	952
Stock options of Adtran Holdings, Inc. for the employees	532	2,986
RSUs of Adtran Holdings, Inc.	2,529	1,437
RSUs of Adtran Holdings, Inc. for the management board	107	106
PSUs of Adtran Holdings, Inc.	214	181
PSUs of Adtran Holdings, Inc. for the management board	27	263
	3,165	5,949

Share-based compensation expenses result primarily from the granting of share-based compensation instruments by Adtran Holdings, Inc. to employees and management board members of Adtran Networks SE and its subsidiaries, in accordance with IFRS 2.43B (b). The decrease in share-based compensation expenses is primarily due to vesting of a large number of stock options. Furthermore, as a result of the termination of a board member, his non-vested stock options have forfeited at the end of 2025. This results in income from the reversal of expenses accumulated in previous years.The increase in RSU expenses results from the granting of new RSUs in the current fiscal year.

Due to the stock compensation recharge agreement with Adtran Holdings, Inc., EUR 2,181 thousand was charged (previous year: EUR 3,969 thousand).

(40) Related party transactions

Adtran Holdings, Inc. and its subsidiaries qualify as related parties to Adtran Networks on December 31, 2025, in the sense of IAS 24. On December 31, 2025, Adtran held a 70.83% share in the equity of Adtran Networks SE.

On December 31, 2025 trade accounts payables amounting to EUR 3,338 thousand (prior year: EUR 870 thousand) and trade accounts receivables amounting to EUR 11,012 thousand (prior year: EUR 7,162 prior year) existed in respect to to Adtran Holdings, Inc. and its sister company, Adtran, Inc. and its subsidiaries. The trade accounts receivable relate to the service contracts described below. The trade accounts payable mainly comprise recharges for services provided by employees of Adtran, Inc. in connection with the creation of an intangible asset of Adtran Networks in the amount of EUR 2,151 thousand (prior year: EUR 350 thousand).

In addition, other current assets include receivables from Adtran Holdings, Inc. mainly arising from forfeitures of share-based compensation instruments of the former chief financial officer (see note (12)). For the income / expense incurred in connection with the stock compensation recharge agreement, please refer to note (39). Furthermore, receivables from Adtran, Inc. were purchased as part of a factoring agreement. The matter is described in note (6). In this context, Adtran Holdings, Inc. issued an independent guarantee to the buyer for the receivables of Adtran Networks SE and Adtran Network North America, Inc.

In 2025, Adtran, Inc. purchased products from Adtran Networks in the amount of EUR 2,802 thousand.

On December 31, 2025, mutual reseller agreements between Adtran Networks SE and Adtran, Inc. as well as a stock compensation recharges agreement between Adtran Networks SE and Adtran Holdings, Inc. were in place. No expenses or income resulted from the reseller agreements in the fiscal year 2025.

In addition, Adtran Networks Poland and Adtran Networks IT India have concluded R&D service agreements with Adtran, Inc. The resulting income amounts to EUR 10,535 thousand (prior year: EUR 6,681 thousand) for Adtran Networks Poland and EUR 3,208 thousand (prior year: EUR 3,436 thousand) for Adtran Networks IT India. Moreover, Adtran Networks SE recharged EUR 625 thousand to Adtran, Inc. for software expenses in 2025 (prior year: nil). The total value of the income from intercompany service agreements between Adtran Networks SE and Adtran GmbH and between Adtran Networks UK and Adtran Europe, Ltd. amounts to EUR 1,149 thousand (prior year: EUR 354 thousand). The total value of the expense from these agreements amounts to EUR 255 thousand (prior year: nil).

Adtran Networks has on December 31, 2025, a receivable from the profit and loss transfer agreement amounting to EUR 23,783 thousand (December 31, 2024: EUR 47,103 thousand). In 2025, interest income of EUR 1,049 thousand was recognized at an interest rate of 5% in connection with receivables from 2024 (previous year: EUR 1,187 thousand in connection with receivables from 2023).

Moreover on June 4, 2024, Adtran Networks SE granted Adtran, Inc. a loan of USD 17,121 thousand with a carrying amount of EUR 15,352 thousand as of December 31, 2025. The matter is described in note (14).

All transactions with the related parties listed above are conducted on an arm's-length basis.

Remuneration of the management board and supervisory board is disclosed in note (41).

(41) Governing boards and remuneration

Management board

	Resident in	External mandates
Thomas R. StantonChief executive officer	Gurley, Alabama, USA	Chairman of the board and CEO of Adtran Holdings, Inc.Member of the board of Directors of the Economic DevelopmentPartnership of Alabama (EDPA)Member of the board of Directors of Cadence Bank
Christoph GlingenerChief technology officer	Jade, Germany	Chief technology officer of Adtran Holdings, Inc.Member of the board of trustees ofFraunhofer Heinrich-Hertz-Institute,Berlin, Germany
Ulrich DopferChief financial officer(until May 19, 2025)	Alpharetta, Georgia, USA	Until March 9, 2025, Chief financial officer of Adtran Holdings, Inc.
Timothy SantoChief financial officer(since May 29, 2025)	Huntsville, Alabama, USA	Chief financial officer of Adtran Holdings, Inc.

Supervisory board

	Resident in	Occupation	External mandates
Eduard ScheitererChairman	Geretsried,Germany	Pensioner	–
Frank FischerVice Chairman	Kaarst,Germany	Lawyer and Tax Advisor	–
Heike Kratzenstein	Glonn,Germany	CEO Asmodee HoldingGmbH	–

Remuneration of the management board

The total remuneration of the management board recognized in accordance with IFRS is broken down into the various components as follows:

(in thousands of EUR)	2025	2024
Short-term employee benefits	5,117	2,008
Post-employment benefits	—	—
Other long-term benefits	—	898
Termination benefits	238	—
Share-based payment	(110)	1,321
Total compensation	5,245	4,227

Short-term employee benefits include fixed remuneration, fringe benefits and current variable remuneration. Variable compensation of EUR 3,366 thousand was included in 2025, as the underlying targets for revenue and Adjusted EBIT5 of the Adtran group were fully achieved.

Termination benefits consider the remuneration for one former member of the management board between May 19, 2025 and the current year-end.

The total remuneration granted to active members of the management board according to section 314 Paragraph 1 No. 6a HGB was EUR 9,429 thousand in 2025 and EUR 5,234 thousand in 2024. The total remuneration in 2025 considers a clawback for 2024 cash bonus in the amount of EUR 161 thousand.

This includes share-based compensation with a fair value (market value) at the grant date in 2025 of EUR 1,902 thousand (previous year: EUR 999 thousand) for 210,544 issued RSUs (previous year: 155,323) and EUR 2,410 thousand (previous year: EUR 1,329 thousand) for 242,829 issued PSUs (previous year: 195,080 PSUs*)).

*) Prior information year adjusted.

Total remuneration to former members of the management board in accordance with Section 314 paragraph 1 no. 6b HGB was in 2025 EUR 238 thousand (prior year: nil).

In 2025 and 2024, no loans were granted to current members of the management board. As of December 31, 2025 and 2024, there were no receivables from members of the management board.

On December 31, the current members of the management board held the following stock options and other share-based remuneration instruments of Adtran Holdings, Inc.:

Options		RSUs		Annual PSUs		3-year plan PSUs
2025	2024	2025	2024	2025	2024	2025	2024
295,605	514,453	348,049	278,969	336,696	204,750	—	264,902

In 2025, no exercise of stock options occurred by active and former members of the management board (2024: cash inflows of EUR 31 thousand). Further details on the stock option programs is included in note (39).

As of December 31, 2025 and 2024, the active and former members of the management board did not hold any shares in Adtran Networks SE.

Remuneration of the supervisory board

The fixed remuneration to be paid to the supervisory board for 2025 and 2024 totaled EUR 265 thousand each, respectively.

The remuneration for the supervisory board of Adtran Networks SE is paid out in quarterly installments. The fixed remuneration for Q4 2025 amounting to EUR 66 thousand was paid out in January 2026. In the consolidated financial statements, this amount is recognized in other current liabilities.

5 Adjusted EBIT is defined as the Adtran Holdings group earnings before interest and tax, determined based on the audited financial results, and adjusted to remove any restructuring expenses; acquisition-related expenses and amortization of intangibles; stock-based compensation expense; the non-cash change in fair value of equity investments held in the deferred compensation plan; certain professional and other fees and any other non-GAAP exclusions approved by the compensation committee of Adtran Holdings, Inc.

In 2025, current and former members of the supervisory board received no further compensation, in particular no postemployment benefits (prior year: none).

On December 31, 2025, no shares or stock options were held by members of the supervisory board (December 31, 2024: none).

(42) Events after the balance sheet date

On February 20, 2026, the United States Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). The ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain and are subject to further legal, regulatory, and administrative developments. Following the Supreme Court's decision, the U.S. presidential administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from all countries, in addition to any existing non-IEEPA tariffs. There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on the Company's business. The Company continues to monitor and evaluate these developments and assess their potential impact on the Company's business, financial condition, and results of operations.

There were no further events after the balance sheet date that might have a material impact on the net assets and financial position or the results of operations.

Declaration of compliance with the German Corporate Governance Code

Pursuant to section 161 of the German Stock Corporation Law (AktG), the management board and the supervisory board have issued a declaration of compliance with the German Corporate Governance Code. This declaration is published on the group's website www.adtran-networks.com.

Meiningen, March 26, 2026

Thomas R. Stanton

Christoph Glingener Timothy Santo

Affirmative declaration of the legal representatives

We, the members of the management board of Adtran Networks SE, to the best of our knowledge affirm that, in accordance with the applicable reporting principles, the management report and the consolidated financial statements of the Adtran Networks group represent a true and fair view of the net assets, financial position and performance of the group, together with a description of the principal opportunities and risks associated with the expected development of the group.

Meiningen, March 26, 2026

Thomas R. Stanton

Christoph Glingener Timothy Santo

Independent auditor's report

To Adtran Networks SE, Meiningen

Report on the Audit of the Consolidated Financial Statements and of the Combined management report

Opinions

We have audited the consolidated financial statements of Adtran Networks SE, Meiningen, and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at December 31, 2025, the consolidated income statements, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the financial year from January 1 to December 31, 2025, and notes to the consolidated financial statements, including significant information on the accounting policies. In addition, we have audited the report on the situation of the company and the group (hereinafter "combined management report") of Adtran Networks SE for the financial year from January 1 to December 31, 2025.

In accordance with German legal requirements, we have not audited the content of those components of the combined management report specified in the "Other Information" section of our auditor's report.

In our opinion, on the basis of the knowledge obtained in the audit,

• the accompanying consolidated financial statements comply, in all material respects, with the IFRS Accounting Standards issued by the International Accounting Standards Board (IASB) (hereinafter referred to as "IFRS Accounting Standards") as adopted by the EU, and the additional requirements of German commercial law pursuant to Section 315e (1) HGB [Handelsgesetzbuch: German Commercial Code] and, in compliance with these requirements, give a true and fair view of the assets, liabilities, and financial position of the Group as at December 31, 2025, and of its financial performance for the financial year from January 1 to December 31, 2025, and

• the accompanying combined management report as a whole provides an appropriate view of the Group's position. In all material respects, this combined management report is consistent with the consolidated financial statements, complies with German legal requirements and appropriately presents the opportunities and risks of future development. Our opinion on the combined management report does not cover the content of those components of the combined management report specified in the "Other Information" section of the auditor's report.

Pursuant to Section 322 (3) sentence 1 HGB, we declare that our audit has not led to any reservations relating to the legal compliance of the consolidated financial statements and of the combined management report.

Basis for the Opinions

We conducted our audit of the consolidated financial statements and of the combined management report in accordance with Section 317 HGB and the EU Audit Regulation No 537/2014 (referred to subsequently as "EU Audit Regulation") and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Our responsibilities under those requirements and principles are further described in the "Auditor's Responsibilities for the Audit of the Consolidated Financial Statements and of the Combined management report" section of our auditor's report. We are independent of the group entities in accordance with the requirements of European law and German commercial and professional law, and we have fulfilled our other German professional responsibilities in accordance with these requirements. In addition, in accordance with Article 10 (2)(f) of the EU Audit Regulation, we declare that we have not provided non-audit services prohibited under Article 5 (1) of the EU Audit Regulation. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinions on the consolidated financial statements and on the combined management report.

Key Audit Matters in the Audit of the Consolidated Financial Statements

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the annual financial statements for the financial year from January 1 to December 31, 2025. These matters were addressed in the context of our audit of the annual financial statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.

Recoverability of goodwill

Please refer to Note 4 in the notes to the consolidated financial statements for further information on the accounting policies applied and the assumptions used. Disclosures on the value of goodwill and on the amount of the impairment can be found under Note 13 in the notes to the consolidated financial statements.

THE FINANCIAL STATEMENT RISK

As of December 31, 2025, goodwill amounted to EUR 45.3 million and, at 7.3 % of total assets, it accounts for a substantial share of assets.

Goodwill is tested annually at the level of the identified cash-generating units for impairment irrespective of any triggering events. If impairment triggers arise during the financial year, an event-driven impairment test is also carried out during the year. For goodwill impairment testing, the carrying amount is compared with the recoverable amount of the respective cashgenerating unit. If the carrying amount exceeds the recoverable amount, an impairment loss must be recognized. The recoverable amount is the higher amount of fair value less costs to sell and value in use of the cash-generating unit. The reporting date for the impairment test is September 30, 2025.

The goodwill impairment test is complex and is based on a number of assumptions requiring judgement. These include the expected revenue and earnings performance of the cash-generating units for the next four years, the assumed long-term growth rates and the discount rate applied.

As a result of the impairment tests performed, the company did not identify any impairment. However, the company's sensitivity calculations for the cash-generating unit Adtran Networks SE Plus showed that a possible change in earnings performance, long-term growth rate, or discount rate used would result in a write-down to the recoverable amount.

There is the risk for the consolidated financial statements that the identified impairment loss is not recognized in the amount required. There is also the risk that the related disclosures in the notes are not appropriate.

OUR AUDIT APPROACH

With the involvement of our valuation experts, among other things we assessed the appropriateness of key assumptions and the calculation method. To this end, we discussed the expected business and earnings development as well as the assumed long-term growth rates with those responsible for planning. Furthermore, we verified the reconciliation from the budget prepared by management and approved by the supervisory board to the inputs applied in the impairment test. We also evaluated the consistency of the assumptions with external market assessments.

Furthermore, we investigated the Company's planning accuracy by comparing budgeted figures from earlier financial years with the earnings actually realized and by analyzing any deviations. We compared the assumptions and data underlying the discount rate, in particular the risk-free rate, the market risk premium and the beta coefficient, with our own assumptions and publicly available data.

In order to assess the methodologically and mathematically appropriate implementation of the valuation method, we verified the valuation carried out by an independent expert engaged by the company on the basis of our own calculations and analyzed any deviations. We assessed the competence, skills, and objectivity of the external expert. In order to account for the forecast uncertainty, we also examined the effects of possible changes in the discount rate, the assumed business and earnings development and the long-term growth rate by calculating alternative scenarios and comparing them with the Company's valuation results. Finally, we assessed whether the disclosures in the notes on the recoverability of goodwill are appropriate. This also included assessing the adequacy of the disclosures in the notes in accordance with IAS 36.134(f) regarding sensitivities to a possible change in significant assumptions underlying the valuation.

OUR OBSERVATIONS

The calculation method used for impairment testing of goodwill is appropriate and in line with the accounting policies to be applied.

The Company's assumptions and data underlying the measurement are appropriate.

The related disclosures in the notes are appropriate.

Recognition of internally generated intangible assets

Please refer to Note 4 in the notes to the consolidated financial statements for information on the accounting policies applied and the assumptions used. Disclosures on the amount of internally generated intangible assets can be found under Note 13 in the notes to the consolidated financial statements.

THE FINANCIAL STATEMENT RISK

The internally generated intangible assets reported in the consolidated financial statements under "capitalized development projects" amounted to EUR 94.9 million as at December 31, 2025 and, at 15.4 % of total assets, are of considerable significance for the financial position.

Development costs are capitalized if the capitalization requirements of IAS 38 are cumulatively met and are essentially based on the assessment of management that the technical feasibility has been demonstrated, and the development project will generate an inflow of economic benefits. Assets that are not ready for use are tested annually for impairment at the level of the cash-generating unit in accordance with the requirements of IAS 36.10(a). Furthermore, if there are triggering events, an impairment test is carried out at the level of the cash-generating unit regardless of the cause.

There is the risk for the consolidated financial statements that the recognition criteria according to IAS 38 for developments projects are not in place as at the reporting date. In addition, there is the risk that existing impairment losses were not recognized or that the calculated impairment losses are not appropriate.

OUR AUDIT APPROACH

We initially obtained an understanding of the product development process and the Company's process for capitalizing development costs and for assessing their recoverability and evaluated whether the accounting-related manual and IT-based internal controls contained therein were appropriately designed and implemented. Based on the results, we tested the operating effectiveness of selected controls.

With regards to the development projects capitalized for the first time in the 2025 financial year, we used a mathematicalstatistical sample to check whether the criteria for capitalization in accordance with IAS 38.57 were met. Furthermore, we used a mathematical-statistical sample to examine whether the project-specific development hours and other expenses were allocated to the development projects as incurred. For this sample, we also verified and evaluated the determination of the hourly rates used to measure the development hours.

With regards to impairment testing, with the involvement of our valuation specialists we analyzed whether the procedure is in accordance with IAS 36 and whether the key assumptions are plausible, taking into account the current financial development of the Group and the approved planning for subsequent years.

OUR OBSERVATIONS

The assumptions made by the management regarding the recognition of internally generated intangible assets are appropriate.

The underlying approach for the impairment testing of capitalized development costs is appropriate and in line with the accounting policies to be applied. The Company's assumptions and data are appropriate.

Other Information

Management and/or the Supervisory Board are/is responsible for the other information. The other information comprises the following components of the combined management report, whose content was not audited:

• The combined non-financial report, referred to in the combined management report

• The combined corporate governance statement of the company and the group, referred to in the combined management report, and

• information extraneous to management reports and marked as unaudited.

The other information also includes the remaining parts of the annual report. The other information does not include the consolidated financial statements, the combined management report information audited for content and our auditor's report thereon.

Our opinions on the consolidated financial statements and on the combined management report do not cover the other information, and consequently we do not express an opinion or any other form of assurance conclusion thereon.

In connection with our audit, our responsibility is to read the other information and, in so doing, to consider whether the other information

• is materially inconsistent with the consolidated financial statements, with the combined management report information audited for content or our knowledge obtained in the audit, or

• otherwise appears to be materially misstated.

Responsibilities of Management and the Supervisory Board for the Consolidated Financial Statements and the Combined management report

Management is responsible for the preparation of consolidated financial statements that comply, in all material respects, with IFRS Accounting Standards as adopted by the EU and the additional requirements of German commercial law pursuant to

Section 315e (1) HGB and that the consolidated financial statements, in compliance with these requirements, give a true and fair view of the assets, liabilities, financial position, and financial performance of the Group. In addition, management is responsible for such internal control as they have determined necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud (i. e., fraudulent financial reporting and misappropriation of assets) or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern. They also have the responsibility for disclosing, as applicable, matters related to going concern. In addition, they are responsible for financial reporting based on the going concern basis of accounting unless there is an intention to liquidate the Group or to cease operations, or there is no realistic alternative but to do so.

Furthermore, management is responsible for the preparation of the combined management report that, as a whole, provides an appropriate view of the Group's position and is, in all material respects, consistent with the consolidated financial statements, complies with German legal requirements, and appropriately presents the opportunities and risks of future development. In addition, management is responsible for such arrangements and measures (systems) as they have considered necessary to enable the preparation of a combined management report that is in accordance with the applicable German legal requirements, and to be able to provide sufficient appropriate evidence for the assertions in the combined management report.

The supervisory board is responsible for overseeing the Group's financial reporting process for the preparation of the consolidated financial statements and of the combined management report.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements and of the Combined management report

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and whether the combined management report as a whole provides an appropriate view of the Group's position and, in all material respects, is consistent with the consolidated financial statements and the knowledge obtained in the audit, complies with the German legal requirements and appropriately presents the opportunities and risks of future development, as well as to issue an auditor's report that includes our opinions on the consolidated financial statements and on the combined management report.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Section 317 HGB and the EU Audit Regulation and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer (IDW) will always detect a material misstatement. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements and this combined management report.

We exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements and of the combined management report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than the risk of not detecting a material misstatement resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.

• Obtain an understanding of internal control relevant to the audit of the consolidated financial statements and of arrangements and measures relevant to the audit of the combined management report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control or of these arrangements and measures.

• Evaluate the appropriateness of accounting policies used by management and the reasonableness of estimates made by management and related disclosures.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor's report to the related disclosures in the consolidated financial statements and in the combined management report or, if such disclosures are inadequate, to modify our respective opinions. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to be able to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements present the underlying transactions and events in a manner that the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and financial performance of the Group in compliance with IFRS Accounting Standards as adopted by the EU and the additional requirements of German commercial law pursuant to Section 315e (1) HGB.

• Plan and perform the audit of the consolidated financial statements to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business segments within the Group to provide a basis for our opinions on the consolidated financial statements and on the combined management report. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our opinions.

• Evaluate the consistency of the combined management report with the consolidated financial statements, its conformity with [German] law, and the view of the Group's position it provides.

• Perform audit procedures on the prospective information presented by management in the combined management report. On the basis of sufficient appropriate audit evidence we evaluate, in particular, the significant assumptions used by management as a basis for the prospective information, and evaluate the proper derivation of the prospective information from these assumptions. We do not express a separate opinion on the prospective information and on the assumptions used as a basis. There is a substantial unavoidable risk that future events will differ materially from the prospective information.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with the relevant independence requirements, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, the actions taken or safeguards applied to eliminate independence threats.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter.

Other Legal and Regulatory Requirements

Report on the Assurance on the Electronic Rendering of the Consolidated Financial Statements and the Combined management report Prepared for Publication Purposes in Accordance with Section 317 (3a) HGB

Assurance Opinion

We have performed assurance work in accordance with Section 317 (3a) HGB to obtain reasonable assurance about whether the rendering of the consolidated financial statements and the combined management report (hereinafter the "ESEF documents") contained in the electronic file "adtran-2025-12-31-de.xbri" (SHA256-Hashvalue: d3066968a242da9056414290c5dc06d8a369d99e12b38439ced0d57a7c83623b) made available and prepared for publication purposes complies in all material respects with the requirements of Section 328 (1) HGB for the electronic reporting format ("ESEF format"). In accordance with German legal requirements, this assurance work extends only to the conversion of the information contained in the consolidated financial statements and the combined management report into the ESEF format and therefore relates neither to the information contained in these renderings nor to any other information contained in the file identified above.

In our opinion, the rendering of the consolidated financial statements and the combined management report contained in the electronic file made available, identified above and prepared for publication purposes complies in all material respects with the requirements of Section 328 (1) HGB for the electronic reporting format. Beyond this assurance opinion and our audit opinion on the accompanying consolidated financial statements and the accompanying combined management report for the financial year from January 1 to December 31, 2025 contained in the "Report on the Audit of the Consolidated Financial Statements and the Combined management report" above, we do not express any assurance opinion on the information contained within these renderings or on the other information contained in the file identified above.

Basis for the Assurance Opinion

We conducted our assurance work on the rendering of the consolidated financial statements and the combined management report contained in the file made available and identified above in accordance with Section 317 (3a) HGB and the IDW Assurance Standard: Assurance Work on the Electronic Rendering of Financial Statements and Management Reports Prepared for Publication Purposes in Accordance with Section 317 (3a) HGB (IDW AsS 410 (06.2022)). Our responsibility in accordance therewith is further described below. Our audit firm applies the IDW Standard on Quality Management 1: Requirements for Quality Management in Audit Firms (IDW QS 1).

Responsibilities of Management and the Supervisory Board for the ESEF Documents

The Company's management is responsible for the preparation of the ESEF documents including the electronic rendering of the consolidated financial statements and the combined management report in accordance with Section 328 (1) sentence 4 item 1 HGB and for the tagging of the consolidated financial statements in accordance with Section 328 (1) sentence 4 item 2 HGB.

In addition, the company's management is responsible for such internal control that they have considered necessary to enable the preparation of ESEF documents that are free from material intentional or unintentional non-compliance with the requirements of Section 328 (1) HGB for the electronic reporting format.

The supervisory board is responsible for overseeing the process of preparing the ESEF documents as part of the financial reporting process.

Auditor's Responsibilities for the Assurance Work on the ESEF Documents

Our objective is to obtain reasonable assurance about whether the ESEF documents are free from material intentional or unintentional non-compliance with the requirements of Section 328 (1) HGB. We exercise professional judgement and maintain professional scepticism throughout the assurance work. We also:

• Identify and assess the risks of material intentional or unintentional non-compliance with the requirements of Section 328 (1) HGB, design and perform assurance procedures responsive to those risks, and obtain assurance evidence that is sufficient and appropriate to provide a basis for our assurance opinion.

• Obtain an understanding of internal control relevant to the assurance on the ESEF documents in order to design assurance procedures that are appropriate in the circumstances, but not for the purpose of expressing an assurance opinion on the effectiveness of these controls.

• Evaluate the technical validity of the ESEF documents, i. e. whether the file made available containing the ESEF documents meets the requirements of the Commission Delegated Regulation (EU) 2019/815, as amended as at the reporting date, on the technical specification for this electronic file.

• Evaluate whether the ESEF documents provide an XHTML rendering with content equivalent to the audited consolidated financial statements and the audited combined management report.

• Evaluate whether the tagging of the ESEF documents with Inline XBRL technology (iXBRL) in accordance with the requirements of Articles 4 and 6 of the Commission Delegated Regulation (EU) 2019/815, as amended as at the reporting date, enables an appropriate and complete machine-readable XBRL copy of the XHTML rendering.

Further Information pursuant to Article 10 of the EU Audit Regulation

We were elected as auditor of the consolidated financial statements at the annual general meeting on June 27, 2025. We were engaged by the audit committee on November 20, 2025. We have been the auditor of the consolidated financial statements of Adtran Networks SE without interruption since financial year 2024.

We declare that the opinions expressed in this auditor's report are consistent with the additional report to the audit committee pursuant to Article 11 of the EU Audit Regulation (long-form audit report).

In addition to the financial statement audit, we have provided to group entities the following services that are not disclosed in the consolidated financial statements or in the combined management report:

Additionally, to the consolidated financial statements, we audited the annual financial statements and the combined management report of Adtran Networks SE and performed review engagements on interim financial statements and audit procedures for the statutory financial statements of various subsidiaries. Furthermore, we provided advisory services in connection with the initial implementation of IFRS18.

Other Matter – Use of the Auditor's Report

Our auditor's report must always be read together with the audited consolidated financial statements and the audited combined management report as well as the examined ESEF documents. The consolidated financial statements and combined management report converted to the ESEF format – including the versions to be entered in the German Company Register [Unternehmensregister] – are merely electronic renderings of the audited consolidated financial statements and the audited combined management report and do not take their place. In particular, the ESEF report and our assurance opinion contained therein are to be used solely together with the examined ESEF documents made available in electronic form.

German public auditor responsible for the engagement

The German Public Auditor responsible for the engagement is Sina Marschner.

Leipzig, March 26, 2026 KPMG AG Wirtschaftsprüfungsgesellschaft

[signature] Marschner Wirtschaftsprüferin [German Public Auditor] [signature] Kolditz Wirtschaftsprüfer [German Public Auditor]

Additional information

Report of the supervisory board

In the 2025 financial year, the supervisory board once again performed its duties under the law and the company's articles. It carefully and continuously monitored the management board and supported it in all strategic matters. The supervisory board has been directly involved in the early stages of all important strategic decisions of the company. During a total of six ordinary meetings, in which all members of the supervisory board and the members of the management board regularly participated, the management board consistently, promptly and extensively informed the supervisory board about the business situation of the company and the group. In addition, the supervisory board occasionally consults before or after the regular meetings without the management board being present. In particular, the supervisory board consulted on matters regarding strategic orientation, market development and prospects for growth, as well as on the development of net assets, financial position and profitability, including budgeting, investments, personnel, compliance, internal audit and risk management. The supervisory board extensively discussed all important business issues on the basis of the management board's reports. Any deviations of the actual business development from the group's plans and objectives were thoroughly explained by the management board and reviewed by the supervisory board. The supervisory board gave its approvals to all important decisions, after thorough examination and consultation, where required by law or the company's articles and acting in the best interest of the company and the group. Furthermore, on urgent matters resolutions were passed outside of meetings during the year. Moreover, especially the chairman and the vice chairman of the supervisory board maintained regular contact with individual members of the management board outside of scheduled meetings and were kept up-to-date with respect to current business developments, important transactions and forthcoming decisions. Furthermore, the supervisory board held four extraordinary meetings in the fiscal year 2025. For a breakdown of which of the meetings were held face-to-face or as video or telephone conferences and the individual participation, please refer to the tables at the end of this report.

Main management board activities covered and examined by the supervisory board

The supervisory board discussions in 2025 focused mainly on the business development and strategic direction of the company and the group, particularly its revenue, earnings and headcount development, and Adtran Networks SE financial situation. In this context, new opportunities for revenue growth and the development of margins were discussed.

The supervisory board closely monitored and supported the activities of the management board, including discussions on corporate governance. It discussed the group's organization and key business processes with the management board and assured itself of the efficiency of this organization and these processes. The management board submitted to the supervisory board all transactions and decisions requiring approval according to the company's articles. The supervisory board approved all such transactions and decisions.

Committees

In order to perform its tasks efficiently, the supervisory board continued to maintain two committees during 2025, the audit committee and the compensation and nomination committee.

In the 2025 financial year, the audit committee consisted of Frank Fischer (Chairman), Eduard Scheiterer and Heike Kratzenstein. The compensation and nomination committee consisted in the 2025 financial year of Eduard Scheiterer (Chairman), Frank Fischer and Heike Kratzenstein.

The audit committee held five ordinary and two extraordinary meetings during the reporting period. In this respect, too, reference is made to the tables at the end for a breakdown of the individual participation in the meeting and the modalities of the meeting. In addition to reviewing the consolidated financial statements and management report of the group and the annual financial statements and management report of the company a well as the consolidated six-month report and the quarterly releases of the group, the audit committee discussed the financial position and performance of the group, the appointment of the external auditor, the audit scope for 2025, the development of tax positions and risks, internal audit activities, as well as the effectiveness of the internal controls related to financial reporting and of the risk management system.

The compensation and nomination committee sat two times (one ordinary and one extraordinary meeting) during the reporting period. The committee's discussions focused in particular on the remuneration and the contract extensions of the management board members. Individual meeting attendance and meeting modalities are detailed in the tables at the end of the report

Reports on the work of the supervisory board committees were regularly presented and discussed during the subsequent supervisory board plenary meeting.

Education and training measures

The supervisory board members take responsibility for the training and further education measures required for their tasks and receive appropriate support from the company if necessary.

Corporate Governance Code

The supervisory board welcomes the German Corporate Governance Code and supports its objectives. The supervisory board has decided to comply with the recommendations and proposals of the Corporate Governance Code within the Adtran Networks group as far as possible. In its meeting on October 29, 2025, the supervisory board discussed the deviations from the Code and jointly issued the regularly scheduled update on the declaration of compliance in accordance with section 161 AktG. The declaration is made permanently available to shareholders on the company's website.

Annual financial statements and management reports

The consolidated financial statements of the Adtran Networks group as of December 31, 2025, and Adtran Networks SE's annual financial statements for the year ended December 31, 2025, as well as the combined management report of the Adtran Networks group and Adtran Networks SE for the fiscal year 2025 were audited by the company's appointed auditor for 2025, KPMG AG Wirtschaftsprüfungsgesellschaft, Leipzig, who issued unqualified audit opinions. Pursuant to section 315e of the German Commercial Code (Handelsgesetzbuch, HGB), the consolidated annual financial statements have been prepared according to International Financial Reporting Standards (IFRS) as enacted in the EU. All management letter points issued by the auditor were taken up, discussed with the management board, and their consideration was ensured. In addition, the 2025 remuneration report was also audited by the company's appointed auditor and issued with an unqualified opinion.

All relevant accounting documents, financial reports and audit reports were submitted to the supervisory board members prior to the meeting of the supervisory board dealing with the company's and group's 2025 financial statements. On February 23 and March 25, 2026 these documents were discussed and examined in detail jointly by the audit committee and the auditor and in consideration of the auditor's long-form report. The audit committee reported its findings to the entire supervisory board in its meeting on March 26, 2026. Furthermore, the auditor, who was present in both meetings, reported on the material results of the audit, explained net assets, the financial position and the results of operations of the company and the group, and was available to answer additional questions from the members of the supervisory board.

In view and consideration of these audit reports and on the basis of the additional information provided by the auditor, the supervisory board discussed and examined in detail the financial statements and management reports in its meeting on March 26, 2026. It unanimously approved Adtran Networks SE's annual financial statements and management report, as well as Adtran Networks' consolidated annual financial statements and group management report. The annual financial statements of Adtran Networks SE for the fiscal year 2025 are thereby adopted.

Combined separate non-financial report

The company's auditor, KPMG AG Wirtschaftsprüfungsgesellschaft, Leipzig, was also engaged to perform a voluntary limited assurance engagement in accordance with ISAE 3000 (Revised) on the combined separate non-financial (group) report. KPMG AG Wirtschaftsprüfungsgesellschaft, Leipzig issued an unqualified audit opinion. The combined separate non-financial (group) report and the audit opinion of KPMG AG Wirtschaftsprüfungsgesellschaft, Leipzig were forwarded to the members of the supervisory board in good time. In its meeting on March 26, 2026, the supervisory board intensively discussed, examined and approved the combined separate non-financial (group) report. There were no indications for objections to the combined separate non-financial (group) report or the assessment by KPMG AG Wirtschaftsprüfungsgesellschaft, Leipzig.

Changes within the management and supervisory boards

Within the fiscal year 2025, no personnel changes occurred in the supervisory board.

The following personnel changes occurred in the management board during the fiscal year 2025:

Ulrich Dopfer resigned from his position as a member of the management board with effect from May 19, 2025. Timothy Santo was then appointed as a member of the management board of Adtran Networks SE with effect from May 29, 2025 up to and including December 31, 2026. On December 8, 2025, the supervisory board followed the proposal of the compensation and nomination committee and resolved to extend the appointment of Christoph Glingener as member of the management board until December 31, 2026.

The supervisory board would like to thank Ulrich Dopfer for the many years of trusting cooperation and his great commitment and hereby expresses its appreciation for the work he has done.

The supervisory board would like to express its appreciation for the personal dedication, performance and the ongoing commitment of the management board and all employees of the company and the group during 2025.

Individual participation in the meetings according to D.7 DCGK

	Plenum	Audit Committee	Compensation andNominationCommittee
Frank Fischer	10/10	7/7	2/2
Eduard Scheiterer	10/10	7/7	2/2
Heike Kratzenstein	10/10	7/7	2/2

Modality of meeting participation according to D.7 DCGK

	Plenum	Audit Committee	Compensation andNominationCommittee
Presence	1	0	0
Video conference	9	7	2
Telephone conference	0	0	0

March 26, 2026

On behalf of the supervisory board:

Dr. Eduard Scheiterer Chairman of the supervisory board

Corporate information

Corporate headquarters

Adtran Networks SE Campus Martinsried Fraunhoferstrasse 9a 82152 Martinsried/Munich Germany

t +49 89 890 665 0

Registered head office

Maerzenquelle 1–3 98617 Meiningen-Dreissigacker Germany

t +49 3693 450 0

Americas office

Adtran Networks North America, Inc. 5755 Peachtree Industrial Boulevard Norcross, Georgia 30092 USA

t +1 678 728 8600

Asia-Pacific office

Adtran Networks (Shenzhen) Ltd. 18/F, Maoye Times Square Haide 2nd Road Nanshan District Shenzhen 518054 China

t +86 755 2354 6800

Adtran Networks on the web

More information about Adtran Networks, including solutions, technologies and products, can be found on the company's website at www.adtran.com.

PDF files of this annual report as well as quarterly reports and general investor information, are also located on the company's website and can be downloaded in both English and German. Related PDF files are available for download in the investor relations section of the group's website, www.adtran-networks.com.

Investor relations contact

Peter Schuman, IRC +1 256 963 6305 investor.relations@adtran.com

Auditor

KPMG AG Wirtschaftsprüfungsgesellschaft, Leipzig, Germany

Legal counsels

Hogan Lovells, Munich, Germany

Tax advisers

Deloitte, Munich, Germany

Financial calendar 2026

Publication of quarterly release Q1 2026	May 12, 2026Martinsried/Munich, Germany
Annual shareholders' meeting	June 15, 2026Munich, Germany
Publication of six-month report 2026	August 11, 2026Martinsried/Munich, Germany
Publication of quarterly release Q3 2026	November 10, 2026Martinsried/Munich, Germany

www.adtran.com