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Aviat Networks (AVNW): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q4 FY26, to Jul 3, 2026, filed Aug 27, 2026; rules v1.1
Aviat Networks (AVNW): 2 rules of 10 triggered on the filings to Jul 3, 2026: adjusted profit = economic profit; FCF growth = the business improved; 2 with insufficient data; 3 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
Adjusted profit = economic profit Triggered · severity high · confidence low
Adjusted EPS was at least 10% above GAAP in 3 of the last 3 quarters (on average 161% above). Costs excluded every quarter (restructuring, stock compensation, amortisation of acquired intangibles, litigation) are a recurring cost of the business, not a one-off.
Innocent reading: A genuine one-off this year (an impairment, a settlement) that happens to span several quarters.
FCF growth = the business improved Triggered · severity medium · confidence medium
Free cash flow rose $13M, from −$7M to $6M, but working capital released $5M more cash than the year before and capital expenditure fell by $6M: 78% of the increase came from sources that need not repeat. Operating cash flow before working capital rose by $3M.
Innocent reading: An expansion programme finished, so capex fell back to maintenance levels for good.
Every rule
A01 FCF growth = the business improved Triggered severity medium · confidence medium
Free cash flow rose $13M, from −$7M to $6M, but working capital released $5M more cash than the year before and capital expenditure fell by $6M: 78% of the increase came from sources that need not repeat. Operating cash flow before working capital rose by $3M.
The figures and how they are read
| Fiscal year before | FY25 |
| Fiscal year | FY26 |
| Operating cash flow, year before | $6M |
| Operating cash flow | $14M |
| Capex, year before | $13M |
| Capex | $7M |
| Free cash flow, year before | −$7M |
| Free cash flow | $6M |
| Change in FCF | $13M |
| Change in capex | −$6M |
| Working capital: change in its cash contribution | $5M |
| Of which: capex cut | $6M |
| Of which: working capital released | $5M |
| Share of the increase that need not repeat | +78.0% |
| Operating cash flow before working capital: change | 2933000.00 |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY26 (cash flow statement, fiscal year) · FY25 (cash flow statement, fiscal year before)
What would explain it innocently
- An expansion programme finished, so capex fell back to maintenance levels for good
- Suppliers agreed longer payment terms in a contract
- Inventory was brought down after a glut and will stay down
What to look for in the filing
- Maintenance capex (what it costs to keep the assets working)
- Supplier payment terms and any supply-chain financing
- Management's capex guidance for next year
What would show the trap does not apply
- Next year's FCF holds or rises with capex back at its earlier level and working capital no longer releasing cash
- The 10-K's capex guidance and the segment capex show the cut is a completed programme, not deferral
- The working-capital release matches a disclosed change in terms or a divestiture, not stretched payables or a collection push
Look again: next filing.
A07 Stock compensation added back = no economic cost Not triggered confidence high
Stock compensation is 1.4% of revenue: small enough that adding it back changes little.
The figures and how they are read
| Fiscal year | FY26 |
| Stock compensation | $6M |
| Revenue | $440M |
| SBC / revenue | +1.4% |
| Buybacks | 0 |
| Buybacks / SBC | 0.0 |
| Diluted shares, year before | 12.8M shares |
| Diluted shares | 13.0M shares |
| Diluted shares: change | +1.6% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY26 (stock compensation, buybacks and the diluted share count, fiscal year)
B02 Receivables growing = future cash is certain Not triggered confidence medium
Receivables grew 7% against revenue 5% in Q4 FY26; DSO 154 against a median of 153: collections are keeping pace with sales.
The figures and how they are read
| Quarter | Q4 FY26 |
| Revenue, year over year | +4.8% |
| Receivables, year over year | +6.6% |
| Quarter before | Q3 FY26 |
| Revenue y/y, quarter before | -11.2% |
| Receivables y/y, quarter before | +5.4% |
| Days sales outstanding | 154.0 |
| DSO, median of eight quarters | 153.0 |
| Receivables | $192M |
| Revenue | $121M |
receivables and revenue against the same quarter a year earlier; DSO = receivables / quarterly revenue × days, against the median of the eight quarters before
Source: Q4 FY26 (receivables and revenue) · Q4 FY25 (the same quarter a year earlier)
B08 Adjusted profit = economic profit Triggered severity high · confidence low
Adjusted EPS was at least 10% above GAAP in 3 of the last 3 quarters (on average 161% above). Costs excluded every quarter (restructuring, stock compensation, amortisation of acquired intangibles, litigation) are a recurring cost of the business, not a one-off.
The figures and how they are read
| Quarter / adjusted EPS / GAAP EPS / gap | 2025-09-30 / 0.43 / 0.01 / 0.977; 2025-12-31 / 0.54 / 0.44 / 0.185; 2026-03-31 / 0.06 / -0.16 / 3.667 |
| Quarters with adjusted ≥ 10% above GAAP | 3 |
| Quarters compared | 3 |
| Latest gap | +366.7% |
the analysts' 'actual' (usually the company's adjusted EPS) against GAAP net income ÷ diluted shares for the matching quarter; a gap of 10% or more counts (the stand-in until three releases' reconciliation tables are on file)
Source: 2025-09-30 (adjusted 0.43 vs GAAP 0.01) · 2025-12-31 (adjusted 0.54 vs GAAP 0.44) · 2026-03-31 (adjusted 0.06 vs GAAP -0.16)
What would explain it innocently
- A genuine one-off this year (an impairment, a settlement) that happens to span several quarters
- Amortisation of acquired intangibles, which many investors also exclude by choice
- The analysts' 'actual' is not the company's own adjusted figure
What to look for in the filing
- The reconciliation table in the earnings release: which items, how much, how often
- Whether the same items were excluded in earlier years
What would show the trap does not apply
- The reconciliation shows the excluded items ending (a restructuring with its final charge, a settlement paid) and the gap to GAAP closes in the next quarters
- The excluded items are only amortisation of acquired intangibles and the cash paid for the deals is in the investing cash flow
Look again: next filing.
C02 Low net debt = no refinancing risk Not triggered confidence medium
$8M comes due within a year, 9.2× covered by cash and investments of $73M.
The figures and how they are read
| Cash and investments | $73M |
| Debt | $97M |
| Net debt | $24M |
| Due within a year | $8M |
| Read from | the current portion of debt on the balance sheet |
| Free cash flow, twelve months | — |
| Cash plus free cash flow | $73M |
| Coverage of what is due | 9.2 |
| Due in the second year | — |
| Balance sheet date | 2026-07-03 |
due within a year from the maturity table (else the current portion of debt), against cash and investments plus free cash flow over the last twelve months (zero if negative); no credit lines assumed
Source: 2026-07-03 (debt maturities, cash and investments)
D03 EPS growth = profit growth Not applicable
a loss in one of the quarters: EPS growth has no meaning
E02 Low P/E at a cyclical peak = undervalued Insufficient data
no market value or trailing net income in the valuation research
E07 A precise DCF value = the true value Insufficient data
no DCF in the valuation research for this company
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → Aviat Networks: cash flow →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.