On this page of StockholderLetter.com we present the latest annual shareholder letter from AVIAT NETWORKS, INC. — ticker symbol AVNW. Reading current and past AVNW letters to shareholders can bring important insights into the investment thesis.

 •  10/7/2024 Letter Continued (Full PDF)
 •  9/25/2023 AVNW Stockholder Letter
 •  More "Manufacturing" Category Stockholder Letters
 •  AVNW Benford's Law Stock Score = 97

AVNW Shareholder/Stockholder Letter Transcript:

2024
Proxy Statement
& Annual Report
Aviat Networks, Inc.


October 7, 2024
To Our Stockholders,
In Fiscal Year 2024, Aviat saw the benefits of increased organizational capability,
strengthened market leadership position and diversification as a result of implementing
our strategic plan in recent years. A central strategy was the creation and implementation
of the Aviat Operating System which has become a cornerstone of our business
operations and productivity. I am also pleased to see continued embracement of the Aviat
culture of values by new and long-time team members alike. Thanks to the entire Aviat
team for their hard work and contributions towards our successes in FY24.
2024 Results Highlights
Our work on values and talent in combination with strategy and execution has translated
into growth. We have seen growth in several key areas and launched new product
offerings, including:


44% growth in software sales
359% growth in Access LTE/5G
36% growth in Managed Services
21% increase in sales through Aviat Store
In this time, we have also added 380 new customers driven by additions from state and
local governments, service providers, access customers, and the expansion of the Aviat
Store platform internationally.
We also track our vitality: 21% of bookings in FY2024 came from products introduced
within the last 3 years.
Foundational to these results is the Aviat Operating System, which has developed into a
powerful organizational capability that contributed to our progress in FY24.
The Aviat Operating System
The Aviat Operating System enabled us to deliver core growth, achieve the synergies
associated with the Pasolink transaction announced November 30, 2023, and prepare for
the 4RF transaction (announced shortly after the fiscal year conclusion).

The Aviat Operating System has four principal elements: customer focus, innovation,
supply chain, and talent. We focus on these four elements which are most impactful to
our shareholders, customers and employees. In FY24, the operating system was
challenged by both of our organic and inorganic growth ambitions. Below, the highlights
of our progress.
Customer Focus:
We continued to drive our strategic marketing process across the organization. This
process of gaining deep understanding of our customers    business needs and economics
through structured voice of the customer (VOC), and delivering products that meet their
unmet economic needs, has been at the heart of our product and market successes over
the past 4.5 years. We have expanded our strategic marketing VOC process to develop
understanding prior to acquisition. This understanding allows us to develop hypotheses
and execution plans prior to the first day of ownership. Further, we have brought many of
the customer-facing employees from our acquisitions into the process. We believe the
process is fundamental. Strategic marketing and VOC are too important to be limited to
a few individuals. Our approach aims to create pervasive thinking about customers,
customer problems and the economics of the solution. Some key accomplishments made
possible by our customer focus in FY24:



Release of our new Ultra-High Power (UHP) radio,
Identification, diligence, and integration of our latest acquisition, 4RF.
Launch of PV+ on Pasolink and development an updated Pasolink roadmap.
Expansion of our total cost of ownership modeling to all our product lines including
Pasolink and Access
Win of our first smart city application and PV+ for Access based on VOC and new
total cost of ownership model.
Innovation:
We innovate to support Aviat   s growth. In FY24 we further advanced our processes. We
put a strong focus on the alignment between hardware and software development
processes and the readiness for customer deployments. We established a much closer
cross-functional collaboration between R&D, Marketing, Technical Support, Sales, and
key customers. The improved processes and cross-functional collaboration have been
instrumental for the successful launch of the products listed above. These examples
illustrate how the latest advancements in Aviat   s processes are directly contributing to the
development and launch of innovative products creating differentiation, preference and
leadership for Aviat.
Supply Chain:
Aviat continues to focus on supplier engagement as a differentiator. During the pandemic,
the focus was securing supply, and the engagement has now shifted to performance

improvements such as lead-time reductions. Additionally, during the supply chain crisis
Aviat procured strategic components and maintained safety stock due to uncertainty of
supply. With the easing of supply, these purchases have shifted back to our contract
manufacturers. This has resulted in improved inventory turns and a reduction in
component inventory. With the NEC Wireless acquisition in FY24, Aviat has new
opportunities for supplier engagement and improvements. We will focus on rationalization
of the supply base and cost reductions.
Talent:
Our talent and values are the foundation of Aviat   s success, and we work together to
ensure strategic alignment with our organizational goals. We empowered all employees
to engage in strategic problem solving and innovation by completing a global internal
certification program on a variety of lean tools and methodologies and providing
structured opportunities for employees to share their improvement ideas. We are all
accountable for optimizing our processes and execution of initiatives. Enhancements to
our talent management tools in FY24 enabled us to conduct succession planning
throughout the entire organization and has improved our efficiency and visibility to talent
across the company. In December, we welcomed approximately 200 employees from
over 15 countries to Aviat with the acquisition of the NEC Wireless business. We
appreciate the diverse experience and contributions that they bring to Aviat. Our
engagement efforts including cascading strategic goals through the organization,
feedback surveys for new hires and existing employees, recognition for living our values
and focus on development have allowed us to maintain turnover below industry
benchmarks. Our culture has become a unique differentiator in attracting and retaining
top talent.
Aviat Operating System Role in Acquisitions
The Aviat Operating System also plays a large part in the acquisitions that we execute.
From screening transactions through the lens of customer focus (e.g., what would this
acquisition target bring to Aviat   s existing customers and vice versa) to integration, the
team utilizes all aspects to maximize impact and efficiency. This can be seen in our results
of the acquisitions we have made. Our Redline Communications acquisition, which closed
two years ago in July 2022, has yielded an IRR in excess of 25% to date. We achieved
the goals of accretion and profitability we stated to shareholders and have made this
transaction an excellent use of capital.
Our Pasolink integration has gotten off to a good start as we have aggressively managed
costs and proactively looked to improve inefficiencies out of the gate. For shareholders,
this has translated into returns from Pasolink ahead of our acquisition model and earnings
accretion one quarter earlier than our prior estimate and two quarters ahead of our initial
plans. We have expressed publicly that the Pasolink transaction is currently tracking to >
2.5x Aviat   s weighted average cost of capital. We will be more precise in reporting the
return metric as we progress in time. We have gotten off to a strong start and there is
ample work still to be done in finishing the integration work from Pasolink however our



 10/7/2024 Letter Continued (Full PDF)