Q3 2025 CommScope Holding Company Inc Earnings Call

Speaker #1: Good day and thank you for standing by . Welcome to Commscope . S third Quarter 2020 Earnings Conference Call . At this time , all participants are in a listen only mode .

Operator: Good day and thank you for standing by. Welcome to CommScope's third quarter 2025 earnings conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Massimo DiSabato, VP Investor Relations. Please go ahead.

Speaker #1: After the speaker's presentation , there will be a question and answer session . To ask a question during the session , you will need to press star one one on your telephone .

Speaker #1: You will then hear an automated message advising your hand is raised . To withdraw your question , please press star one . One again .

Speaker #1: Please be advised that today's conference is being recorded . I would now like to hand the conference over to your speaker today , Massimo Disabato VP , Investor Relations .

Speaker #2: Thank you for joining us today to discuss 2020 third quarter results. I'm Massimo DiSabato, Vice President of Investor Relations for CommScope.

Massimo DiSabato: Good morning and thank you for joining us today to discuss CommScope's 2025 third quarter results. I'm Massimo DiSabato, Vice President of Investor Relations for CommScope and with me on today's call are Chuck Treadway, President and CEO, and Kyle Lorentzen, Executive Vice President and CFO. You can find the slides that accompany this report on our investor relations website. Please note that some of our comments today will contain forward-looking statements based on our current view of our business and actual future results may differ materially. Please see our recent SEC filings which identify the principal risks and uncertainties that could affect future performance. Before I turn the call over to Chuck, I have a few housekeeping items to review. Today we will discuss certain adjusted or non-GAAP financial measures which are described in more detail in this morning's earnings materials.

Speaker #2: And with me on today's call are Chuck Tredway , president and CEO . And Kyle Lorentzen Executive Vice president . And CFO . You can find the slides that accompany this report on our Investor Relations website .

Speaker #2: Please note that some of our comments today will contain forward looking statements based on our current view of our business and actual future results may differ materially .

Speaker #2: Please see our recent SEC filings , which identify the principal risks and uncertainties that could affect future performance . Before I turn the call over to Chuck , I have a few housekeeping items to review .

Speaker #2: Today we will discuss certain adjusted or non-GAAP financial measures , which are described in more detail in this morning's earnings Materials . Reconciliations of non-GAAP financial measures and other associated disclosures are contained in our earnings materials and posted on our website .

Massimo DiSabato: Reconciliations of non-GAAP financial measures and other associated disclosures are contained in our earnings materials and posted on our website. All references during today's discussion will be on our adjusted results. All quarterly growth rates described during today's presentation are on a year-over-year basis unless otherwise noted. I'll now turn the call over to our President and CEO, Chuck Treadway.

Speaker #2: All references during today's discussion will be on our adjusted results . All quarterly growth rates described during today's presentation are on a year over year basis , unless otherwise noted .

Speaker #2: I'll now turn the call over to our president and CEO , Chuck Tredway . Thank you Massimo . Good morning everyone .

Chuck Treadway: Thank you, Massimo.

Chuck Treadway: Good morning everyone. I'll begin on slide 2. I'm pleased to announce in the third quarter CommScope delivered net sales of $1.63 billion, a year over year increase of 51%, and adjusted EBITDA of $402 million, a year over year increase of 97%. These very positive results were generated by strong performance in all of our segments. The third quarter also marked the sixth consecutive quarter that we sequentially improved adjusted EBITDA. The adjusted EBITDA as a percentage of revenue of 24.7% was a record for CommScope since the ARRIS acquisition, reaffirming our strategy of managing what we can control and maximizing unfavorable market conditions. Our RemainCo business, comprised of ANS and Ruckus, delivered net sales of $516 million in the third quarter, which was 49% above the prior year, and delivered $91 million of adjusted EBITDA in the quarter, an increase of 95% versus the third quarter of 2024.

Speaker #3: I'll begin on slide two . I'm pleased to announce in the third quarter , Commscope delivered net sales of $1.63 billion a year over year increase of 51% .

Speaker #3: And adjusted EBITDA of $402 million a year over year increase of 97% . These very positive results were generated by strong performance in all of our segments .

Speaker #3: The third quarter also marked the sixth consecutive quarter that we sequentially improved adjusted EBITDA . The adjusted EBITDA as a percentage of revenue of 24.7% , was a record for Commscope since the heiress acquisition .

Speaker #3: Reaffirming our strategy of managing what we can control and maximizing on favorable market conditions . Our Remainco business , comprised of Aon's and Ruckus , delivered net sales of $516 million in the third quarter , which was 49% above the prior year , and delivered $91 million of adjusted EBITDA in the quarter .

Speaker #3: An increase of 95% versus the third quarter of 2020 . For Remainco adjusted EBITDA , as a percentage of sales was 17.5% , 400 basis points above the prior year .

Chuck Treadway: RemainCo adjusted EBITDA as a percentage of sales was 17.5%, 400 basis points above the prior year. These businesses continue to benefit from the upgrade cycles as well as new product introductions. In addition to our strong EBITDA performance, we ended the quarter with $705 million of cash, an increase of $134 million in the quarter. This further strengthens our liquidity position and we expect to generate incremental cash in the fourth quarter. With that, now I'd like to give you an update on each of our businesses, starting with the two businesses that will make up RemainCo, ANS and Ruckus. Starting with ANS, net sales of $338 million were up 77% in the third quarter compared to the prior year and adjusted EBITDA was up 169%. These increases were primarily driven by our continued deployment of our new DOCSIS 4.0 amplifier and node products.

Speaker #3: These businesses continue to benefit from the upgrade cycles , as well as new product introductions . In addition to our strong EBITDA performance .

Speaker #3: We ended the quarter with $705 million of cash and increase of . This further strengthens our liquidity position , and we expect to generate incremental cash in the fourth quarter .

Speaker #3: With that , now , I'd like to give you an update on each of our businesses , starting with the two businesses that will make up Remainco Ans and ruckus .

Speaker #3: Starting with Ans . Net sales of $338 million were up 77% in the third quarter , compared to the prior year , and adjusted EBITDA was up 169% .

Speaker #3: These increases were primarily driven by our continued deployment of our new Docsis four amplifier and node products . Our amplifier deployment with Comcast continues to go well , and this is reflected in our results $134 million in the quarter .

Chuck Treadway: Our FDX amplifier deployment with Comcast continues to go well and this is reflected in our results. As stated before, we believe ANS is well positioned with decades of knowledge of our customers' ecosystems and our breadth of new products for service providers to take advantage of the latest DOCSIS upgrade cycle as well as evolving their legacy DOCSIS 3.1 networks. Our product range includes all areas of the HFC network including DOCSIS 3.1 E and DOCSIS 4.0 solutions. During the third quarter we announced that CommScope achieved record breaking speeds at the CableLabs DOCSIS 4.0 and DAA technology Interop event. Powered by CommScope's vCCAP Evo Platform, the team achieved unprecedented speeds of 16.25 gigabits per second in the downstream across two load balance DOCSIS 4.0 modems from multiple manufacturers using various chipsets.

Speaker #3: As stated before , we believe Ans is well positioned with decades of knowledge of our customers , ecosystems and our breadth of new products for service providers to take advantage of the latest Docsis upgrade cycle , as well as evolving their legacy , Docsis three one networks .

Speaker #3: Our product range includes all areas of HFC network , including Docsis three one , three one and Docsis for all solutions . During the third quarter , we announced that Commscope achieved record breaking speeds at the Cablelabs Docsis 400 and Da technology interop event powered by Commscope Evo virtual C-cap platform .

Speaker #3: The team achieved unprecedented speeds of 16.25 gigabits per second in the downstream across two load balanced oxysporum modems for multiple manufacturers using various chipsets .

Speaker #3: In related tests , the team also achieved downstream speeds of over 9.4 gigabits per second on a single Docsis four modem . These breakthroughs show that a Docsis 400 network can compete with the fiber to the home speeds .

Chuck Treadway: In related tests, the CommScope team also achieved downstream speeds of over 9.4 gigabits per second on a single DOCSIS 4.0 modem. These breakthroughs show that a DOCSIS 4.0 network can compete with the fiber to the home speeds. Additionally, over the last quarter we found traction with our newly released PON portfolio at a major North American service provider which will deliver multi-gigabit bandwidth and scalable options for growth. We also deployed our Virtual Broadband Network Gateway (vBNG) solution with a major MSO. The vBNG solution is a software-based service that serves as a virtualized alternative to traditional gateways. vBNGs provide scalable, agile, and cost-effective broadband services. They help manage subscriber sessions and advanced routing and flexible deployment in various architectures like cloud, native, and container-based networks for HFC, PON, and mobile networks.

Speaker #3: Additionally , over the last quarter , we found traction with our newly released Pon portfolio at a major North American service provider , which will deliver Multi-gigabit bandwidth and scalable options for growth .

Speaker #3: We also deployed our virtual broadband Network gateway solution with a major MSO . The solution is a software based service that serves as a virtualized alternative to traditional gateways .

Speaker #3: Vbgs provide scalable , agile , and cost effective broadband services to help manage subscriber sessions , advance routing , and flexible deployment in various architectures like cloud native and container based networks .

Speaker #3: For HFC , Pon and mobile networks . At the CTE Tech Expo last month , we showcased our entire suite of products and solutions that help customers upgrade their networks in the most agile ways possible .

Chuck Treadway: At the FCTE Tech Expo last month, we showcased our entire suite of products and solutions that help customers upgrade their networks in the most agile ways possible. On display were DOCSIS 4.0 and unified solutions, including the RPDS and smart amplifiers. Coming out of the show, there seems to be some resurgence of excitement for DOCSIS 4.0 and DOCSIS 3.1. In addition, during the show we jointly announced with Comcast that the CommScope DOCSIS 4.0 FDX amplifiers feature an AI-driven management core which auto detects and corrects network events in real time to deliver superior intelligence, performance, and reliability across Comcast access network. CommScope has long been a world leader in network amplifiers with nearly 10 million shipped since the inception of DOCSIS 1.0 in 1997.

Speaker #3: On display were Doxes 4.0 and Unified Solutions , including the Rpds and Smart Amplifiers . Coming out of the show , there seems to be some resurgence of excitement for Docsis 4.0 and Docsis point one .

Speaker #3: In addition , during the show , we jointly announced with Comcast that the Commscope Docsis 400 ft amplifiers feature an AI driven management core , which auto detects and corrects network events in real time to deliver superior intelligence , performance and reliability across Comcast Access Network .

Speaker #3: CommScope has long been a world leader in network amplifiers, with nearly 10 million shipped since the inception of DOCSIS 1 in 1997.

Speaker #3: In 2026 , Comp Scope plans to introduce amplifiers and remote fi devices that deliver Docsis for unified operation , supporting both the 1.8GHz extended spectrum , Docsis and FDD networks with a single device .

Chuck Treadway: In 2026, CommScope plans to introduce amplifiers and remote PHY devices that deliver DOCSIS 4.0 unified operation supporting both the 1.8 GHz extended spectrum DOCSIS and FDX networks with a single device. As we have stated in the past, we are the only solution provider offering the full DOCSIS 4.0 access technology ecosystem including nodes, DAA modules, and amplifiers. CommScope is uniquely positioned to support any operator's path to 10G services. We continue to move forward with our new unified products that are now in the lab testing phase and expected to be available in the first half of 2026. We are pleased with the direction that ANS is headed as the market shifts towards DOCSIS 4.0. We have positioned our product portfolio to take advantage of many upgrade paths. The new products position ANS to maintain performance as the market shifts away from some of our legacy products.

Speaker #3: As we have stated in the past , we are the only solution provider offering the full Docsis Foro Access technology ecosystem , including nodes , DAA modules , and amplifiers .

Speaker #3: Comp scope is uniquely positioned to support any operator's path to services . We continue to move forward with our new unified products that are now in the lab .

Speaker #3: Testing phase and expected to be available in the first half of 2026. We are pleased with the direction that Ans has headed as the market shifts towards Doxes 4.0.

Speaker #3: We have positioned our product portfolio to take advantage of many upgrade paths. The new products position us to maintain performance as the market shifts away from some of our legacy products.

Speaker #3: Turning to ruckus , revenue was up 15% in the third quarter compared to the prior year records . Adjusted EBITDA of $36 million was up $10 million , or 38% , versus Q3 of 2024 .

Chuck Treadway: Turning to Ruckus, revenue was up 15% in the third quarter compared to the prior year. Ruckus adjusted EBITDA of $36 million was up $10 million or 38% versus Q3 of 2024. In the third quarter, we saw continued strong demand for Ruckus driven by our Wi-Fi 7 products and subscription services as well as our go-to-market initiatives. During the quarter, we deployed our first T670 outdoor Wi-Fi access points for large private venues. It is a high-density AI-driven Wi-Fi 7 outdoor access point with a unique programmable directional antenna. We received U.S. Federal Government certification for our ICX 8200 as one of the first companies to achieve the new FIPS 140 certification across our ICX product line, enabling sales to U.S. Federal customers. Ruckus switches are designed to handle next-generation wireless and IoT networks, delivering exceptional and reliable performance.

Speaker #3: In the third quarter , we saw continued strong demand for ruckus , driven by our Wi-Fi seven products and subscription services . As well as our go to market initiatives .

Speaker #3: During the quarter , we deployed our first T670i outdoor Wi-Fi access points for large private venues . It is a high density , AI driven Wi-Fi seven outdoor access point with a unique programmable directional antenna .

Speaker #3: We received U.S. federal government certification for our IC 8200 as one of the first companies to achieve the new FIPS 143 certification across our IC product line, enabling sales to U.S. federal customers.

Speaker #3: Record switches are designed to handle next generation wireless and IoT networks , delivering exceptional and reliable performance . Also at the CTE Tech Expo , we demonstrated our mobile data offload product .

Chuck Treadway: Also, at the SCTE Tech Expo, we demonstrated our Mobile Data Offload product. This provides MSOs and their mobile customers with higher data speeds, better reliability, seamless roaming, and lower data costs to the operator. Enabled with our cloud-based Ruckus AI, it delivers unmatched network visibility, analytics, and troubleshooting to ensure exceptional customer experience. Utilizing our high-density T670 access point, we provide the required reliability and high throughput that is necessary for mobile data offload. This solution is focused on improving data flow, reducing latency, and increasing gross data offload tonnage. Customers have expressed interest in this technology and we expect this to scale in 2026. With the strong year-over-year improvements in pipeline of innovations, we feel that the challenges in 2024 with channel inventory are now well behind us. We continue to benefit from new products and our vertical market strategies.

Speaker #3: This provides MSOs and their mobile customers with higher data speeds , better reliability , seamless roaming and lower data costs to the operator enabled with our cloud based ruckus AI , it delivers unmatched network visibility , analytics and troubleshooting to ensure exceptional customer experience .

Speaker #3: Utilizing our high density T670i access point , we provide the required reliability and high throughput that is necessary for mobile data offload . This solution is focused on improving data flow , reducing latency , and increased gross data offload tonnage .

Speaker #3: Customers have expressed interest in this technology , and we expect this to scale in 2026 with the strong year over year improvements pipeline of innovations , we feel that the challenges in 2024 with channel inventory are now well behind us .

Speaker #3: We continue to benefit from new products and our vertical market strategies . In addition , we beginning to see the impact of adding incremental selling resources as indicated by our increase in sales funnel opportunities .

Chuck Treadway: In addition, we're beginning to see the impact of adding incremental selling resources as indicated by our increase in sales funnel opportunities. We have also seen additional traction in the North American service provider market as more customers are interested in our Ruckus One MDU solutions. These solutions take advantage of our Ruckus One platform and help managed service providers accelerate time to market and reduce operational costs. This fundamentally changes the deployment economics and delivers faster returns on investment. On top of the strong growth in 2025, Ruckus is well positioned for strong growth in 2026 driven by a Wi-Fi 7 product offering, growing demand, and our strategic go-to-market investments. Despite the announced transaction, I will give a brief update on CCS. In the third quarter, CCS revenue was $1.1 billion, an increase of 51% year over year. CCS adjusted EBITDA of $312 million, or an increase of 79%.

Speaker #3: We have also seen additional traction in in North American service provider market as more customers are interested in our ruckus . One MDU solutions .

Speaker #3: These solutions take advantage of our ruckus one platform and help manage service providers , accelerate time to market and reduce operational costs . This fundamentally changes the deployment economics and delivers faster returns on investment .

Speaker #3: On top of the strong growth in 2025 , ruckus is well positioned for strong growth in 2026 , driven by our Wi-Fi seven product offering .

Speaker #3: demand and our strategic go to market investments . Despite the announced transaction , I will give a brief update on KCI in the third quarter .

Speaker #3: Ccis revenue was $1.1 billion , an increase of 51% year over year . KCI adjusted EBITDA of $312 million , or an increase of 79% , as a result of revenue growth , mix and cost leverage .

Chuck Treadway: As a result of revenue growth, mix, and cost leverage, the CCS segment will continue to be a strong cash flow generator until the close of the transaction. Based on current views, we're raising our full year CommScope adjusted EBITDA guidance to $1.30 to $1.35 billion. I want to give you an update on the divestiture of our CCS businesses to Amphenol. The sale of the CCS business was approved by our shareholders on October 16. Based on current progress, we now expect the sale to close in the first quarter of 2026. The transaction will allow us to return significant capital to our shareholders and immediately improves our leverage situation. The CCS business has found a great home with Amphenol and we look forward to working with them to close the transaction. RemainCo will consist of the ANS and Ruckus segments.

Speaker #3: The CCF segment will continue to be a strong cash flow generator until the close of the transaction based on current views , we're raising our full year comp scope Growing , adjusted EBITDA guidance to 1.30 to $1.35 billion .

Speaker #3: I want to give you an update on the divestiture of our core businesses to Amphenol . The sale of the CSW business was approved by our shareholders on October 16th , based on current progress , we now expect the sale to close in the first quarter of 2026 .

Speaker #3: The transaction will allow us to return significant capital to our shareholders and immediately improves our leverage situation . The business has found a great home with Amphenol , and we look forward to working with them to close the transaction .

Speaker #3: Remainco will consist of the Ans and ruckus segments , both of these businesses are recovering from challenging market conditions over the last two years .

Chuck Treadway: Both of these businesses are recovering from challenging market conditions over the last two years. However, they have seen strong recovery in 2025. Based on the third quarter strength and Q4 visibility, we now expect RemainCo to deliver between $350 million and $375 million of adjusted EBITDA in 2025. As we service our customers, we have the right products, solutions, and scale to win new business. We will continue to focus on what we can control with a strategic focus on supporting our customers, innovating for the demands of future advanced networks, and increasing equity value. With that, I'd like to turn things over to Kyle to talk more about our third quarter results.

Speaker #3: However , they have seen strong recovery in 2025 based on the third quarter strength in Q4 . Visibility . We now expect Remainco to deliver between 350 million and $375 million of adjusted EBITDA in 2025 , as we service our customers , we have the right products , solutions and scale to win new business .

Speaker #3: We will continue to focus on what we can control with the strategic focus on supporting our customers , innovating for the demands of future advanced networks and increasing equity value .

Speaker #3: And with that , I'd like to turn things over to Kyle to talk more about our third quarter results .

Speaker #4: Thank you , Chuck , and good morning , everyone . I'll start with an overview of our third quarter results on slide three .

Kyle Lorentzen: Thank you, Chuck, and good morning, everyone. I'll start with an overview of our third quarter results on Slide 3 for CommScope. We reported adjusted EBITDA of $402 million for the third quarter of 2025, which increased 97% from prior year. Third quarter adjusted EBITDA results were up 19% sequentially versus the second quarter of 2025. Our adjusted EBITDA as a percentage of revenues was 24.7%, the best we have seen since the ARRIS acquisition, and increased by 580 basis points year over year and 40 basis points versus the second quarter of 2025. For the third quarter, CommScope reported net sales of $1.63 billion, an increase of 51% from the prior year, driven by an increase in all segments. Adjusted EPS was $0.62 per share versus a loss of $0.06 per share in the third quarter of 2024.

Speaker #4: For Commscope . We reported adjusted EBITDA of $402 million for the third quarter of 2025 , which increased 97% from prior year . Third quarter adjusted EBITDA results were up 19% sequentially versus the second quarter of 2025 .

Speaker #4: Our adjusted EBITDA as a percentage of revenues was 24.7% . The best we have seen since the Arris acquisition and increased by 580 basis points year over year .

Speaker #4: And 40 basis points versus the second quarter of 2025 . For the third quarter , comp scope reported net sales of $1.63 billion , an increase of 51% from the prior year , driven by an increase in all segments .

Speaker #4: Adjusted EPs was $0.62 per share versus a loss of $0.06 per share in the third quarter of 2024 , order rates were down 8% sequentially in the third quarter of 2025 , driven by seasonality and project timing .

Kyle Lorentzen: Order rates were down 8% sequentially in the third quarter of 2025, driven by seasonality and project timing. CommScope backlog ended the quarter at $1.32 billion, down $110 million or 8% versus the end of the second quarter 2025. With our CCS transaction announcement, I would like to separately discuss the strong performance of our two businesses that will make up RemainCo. ANS and Ruckus third quarter revenue in these two businesses was $516 million, up 49% year over year. The stronger revenue resulted in adjusted EBITDA in the RemainCo businesses of $91 million, up 95% versus prior year. We are pleased with the RemainCo third quarter results as they came in above our forecast.

Speaker #4: Commscope backlog ended the quarter at $1.32 billion , down $110 million , or 8% , versus the end of the second quarter 2025 .

Speaker #4: With our transaction announcement , I would like to separately discuss the strong performance of our two businesses that will make up Remainco Ans and ruckus .

Speaker #4: Third quarter revenue in these two businesses was $516 million , up 49% year over year . The stronger revenue resulted in adjusted EBITDA in the remainco businesses of $91 million , up 95% versus prior year .

Speaker #4: We are pleased with the Remainco third quarter results as they came in above our forecast . Turning now to our third quarter segment highlights on slide four , starting with our Ans segment .

Kyle Lorentzen: Turning now to our third quarter segment highlights on Slide 4, starting with our ANS segment, net sales of $338 million increased 77% from the prior year as customer inventory levels stabilized and shipments of our DOCSIS 4.0 products have increased. ANS adjusted EBITDA of $54 million was up $34 million or 169% from the prior year, driven by higher revenue. ANS had a very challenging 2024 as customers continued to delay their upgrade cycle and the legacy business continued to decline. In the fourth quarter, we expect revenue to decrease due to project timing. However, we expect adjusted EBITDA to increase slightly. As we have discussed in the past, ANS is a project-driven business with timing of projects driving some volatility in results both from a revenue and EBITDA perspective.

Speaker #4: Net sales of $338 million increased 77% from the prior year as customer inventory levels stabilized and shipments of our Docsis 4.0 products have increased .

Speaker #4: Ans adjusted EBITDA $54 million was up $34 million , or 169% from the prior year , driven by higher revenue . Ans had a very challenging 2024 as customers continued to delay their upgrade cycle and the legacy business continued to decline .

Speaker #4: In the fourth quarter , we expect revenue to decrease due to project timing . However , we expect adjusted EBITDA to increase slightly as we have discussed in the past .

Speaker #4: Ans is a project driven business with timing of projects driving some volatility in results , both from a revenue and EBITDA perspective . We experienced the strong rebound in revenue and adjusted EBITDA year to date as our investments made over the last three years on product development have positioned us for the pending upgrade cycle .

Kyle Lorentzen: We experienced a strong rebound in revenue and adjusted EBITDA year to date as our investments made over the last three years on product development have positioned us for the pending upgrade cycle. The business remains well positioned to take advantage of upgrade cycles while offsetting declines in the legacy business. Ruckus net sales of $179 million increased by 15% versus the third quarter of 2024, driven by normalized inventory in the channel and stronger market demand as well as our go to market initiatives. Ruckus adjusted EBITDA of $36 million increased 38% from the prior year, driven by the increases in revenue and favorable one time items in the quarter of approximately $3 million, offset by investment in go to market. We continue to see strong market conditions driven by the Wi-Fi 7 upgrade cycle. We expect the strong market conditions to remain in 2026.

Speaker #4: The business remains well positioned to take advantage of upgrade cycles while offsetting declines in the legacy business ruckus . Net sales of $179 million increased by 15% versus the third quarter of 2024 , driven by normalized inventory in the channel and stronger market demand , as well as our go to market initiatives .

Speaker #4: Ruckus adjusted EBITDA of $36 million increased 38% from the prior year , driven by the increases in revenue and favorable one time items in the quarter of approximately $3 million , offset by investment in go to market .

Speaker #4: We continue to see strong market conditions driven by the Wi-Fi seven upgrade cycle . We expect the strong market conditions to remain in 2026 .

Speaker #4: As noted in previous calls , the overhang from channel inventory lasted through the first half of 2024 . We are now seeing the benefits of normalized inventory in the channel , as well as growing market demand .

Kyle Lorentzen: As noted in previous calls, the overhang from channel inventory lasted through the first half of 2024. We are now seeing the benefits of normalized inventory in the channel as well as growing market demand. We continue to drive our go to market strategies and Ruckus new product initiatives. In addition, we're beginning to see the impact of adding incremental selling resources. However, the net benefit of these new resources will not be realized until 2026. With the additional selling resources, new products, and vertical market focus, we are well positioned to grow as we move into 2026. Fourth quarter adjusted EBITDA is expected to decline compared to third quarter results due to the elimination of one time benefits in the third quarter and seasonality. Finishing with CCS, as Chuck mentioned, net sales of $1.1 billion increased 51% from the prior year.

Speaker #4: We continue to drive our go to market strategies and ruckus new product initiatives . In addition , we are beginning to see impact of adding incremental selling resources .

Speaker #4: However , the net benefit of these new resources will not be realized until 2026 with the additional selling resources , new products , and vertical market focus .

Speaker #4: We are well positioned to grow as we move into 2026 . Fourth quarter adjusted EBITDA is expected to decline compared to third quarter results due to the elimination of one time benefits in the third quarter and seasonality finishing with CSE .

Speaker #4: As Chuck mentioned, net sales of $1.1 billion increased 51% from the prior year. CSE adjusted EBITDA of $312 million increased 79% from the prior year.

Kyle Lorentzen: CCS adjusted EBITDA of $312 million increased 79% from the prior year. CCS adjusted EBITDA as a percentage of revenue for the quarter remained strong at 28%, driven by favorable mix and cost leverage. The business continues to perform well, and we look forward to continuing to generate strong cash flow ahead of the sale to Amphenol. Turning to Slide 5 for an update on cash flow, during the quarter, we generated cash flow from operations of $151 million and free cash flow of $135 million. Due to strong results and updated adjusted EBITDA guideposts, we now expect cash to be up approximately $250 million from where we started the year. In this guidance, we still project an investment in working capital and capital expenditures of over $200 million, driven by growth in the business.

Speaker #4: CSE adjusted EBITDA as a percentage of revenue for the quarter remained strong at 28% , driven by favorable mix and cost leverage . The business continues to perform well , and we look forward to continuing to generate strong cash flow ahead of the sale to Amphenol .

Speaker #4: Turning to slide five for an update on cash flow . During the quarter , we generated cash flow from operations of $151 million and free cash flow of $135 million , due to strong results and updated adjusted EBITDA Guideposts , we now expect cash to be up approximately $250 million from where we started the year .

Speaker #4: In this guidance , we still project an investment in working capital and capital expenditures of over $200 million , driven by growth in the business .

Speaker #4: Turning to slide six for an update on our liquidity and capital structure during the quarter , our cash and liquidity remained strong . We ended the quarter with $705 million in cash and total available cash and liquidity of $1.28 billion during the quarter , our cash balance increased by $134 million in the quarter .

Kyle Lorentzen: Turning to Slide 6 for an update on our liquidity and capital structure, during the quarter, our cash and liquidity remained strong. We ended the quarter with $705 million in global cash and total available cash and liquidity of $1.28 billion. During the quarter, our cash balance increased by $134 million. In the quarter, we purchased no debt or equity on the open market. However, going forward we may continue to use cash opportunistically to buy back debt and equity. The company ended the quarter with net leverage ratio of 5.5 times. I will conclude my prepared remarks with some commentary around our expectations for the fourth quarter of 2025. We will continue to focus on running the businesses and delivering results while preparing for the closing of the CCS transaction in the first quarter of 2026.

Speaker #4: We purchased no debt or equity on the open market. However, going forward, we may continue to use cash opportunistically to buy back debt and equity.

Speaker #4: The company ended the quarter with net leverage ratio of 5.5 times . I will conclude my prepared remarks with some commentary around our expectations for the fourth quarter of 2025 .

Speaker #4: We will continue to focus on running the businesses and delivering results while preparing for the closing of the CSE . Transaction in the first quarter of 2026 .

Speaker #4: As Chuck mentioned earlier , this is a transformational transaction that creates shareholder value by strengthening the balance sheet with expected net proceeds of approximately $10 billion .

Kyle Lorentzen: As Chuck mentioned earlier, this is a transformational transaction that creates shareholder value while strengthening the balance sheet. With expected net proceeds of approximately $10 billion, we expect to repay all of our existing debt and redeem our preferred equity with our excess cash and modest new leverage on the remaining company. We plan to distribute the excess cash to our shareholders as a special dividend within 60 to 90 days of the transaction closing. The exact amount of the special dividend will be determined after closing by the board. On the performance side, we have seen six quarters of sequential quarterly adjusted EBITDA improvement during the third quarter of 2025. We have continued to see strong performance in all of our business segments, the ANS and Ruckus segments continue to perform well with third quarter adjusted EBITDA of $91 million, up 95% over prior year.

Speaker #4: We expect to repay all of our existing debt and redeem our preferred equity with our excess cash and modest new leverage on the remaining company , we plan to distribute the excess cash to our shareholders as a special dividend within 60 to 90 days of the transaction .

Speaker #4: Closing the exact amount of the special dividend will be determined after closing by the board on the performance side , we have seen six quarters of sequential quarterly adjusted EBITDA improvement during the third quarter of 2025 .

Speaker #4: We have continued to see strong performance in all of our business segments . The Ans and ruckus segments continue to perform well with third quarter adjusted EBITDA of $91 million , up 95% over prior year as a result of the continued strong results .

Kyle Lorentzen: As a result of the continued strong results, we are raising our 2025 RemainCo adjusted EBITDA guidepost from $325 million to $350 million, up to $350 million to $375 million. The midpoint of this RemainCo guidance indicates a sequential adjusted EBITDA decline in the fourth quarter driven by seasonality, particularly in the Ruckus business. As for CommScope, we are raising our 2025 CommScope adjusted EBITDA guidepost from $1.15 billion to $1.2 billion, up to $1.3 billion to $1.35 billion. With that, I'd like to give the floor back to Chuck for some closing remarks.

Speaker #4: We are raising our 2025 Remainco adjusted EBITDA Guideposts from $325 million to $350 million , up to $350 million to $375 million . The midpoint of this Remainco guidance indicates a sequential adjusted EBITDA decline in the fourth quarter , driven by seasonality , particularly in the ruckus business , as for scope , we are raising our 2025 scope adjusted EBITDA Guideposts from $1.15 billion to $1.2 billion , up to $1.3 billion to $1.35 billion , and with that , I'd like to give the floor back to Chuck for some closing remarks .

Speaker #3: Thank you. Kyle, in closing, we have delivered another strong quarter driven by strong market conditions and our focus on internal initiatives.

Chuck Treadway: Thank you, Kyle. In closing, we have delivered another strong quarter driven by strong market conditions and our focus on internal initiatives. The CCS transaction is ahead of schedule and is now expected to close in the first quarter of 2026. This is a transformational transaction for CommScope that unlocks equity value, allows us to return significant cash to our shareholders, and strengthens the businesses. Additionally, we are encouraged by both the performance and positioning of the RemainCo businesses, ANS and Ruckus. Both businesses exceeded our projections in the quarter, and this performance demonstrates the strong positioning of Ruckus and ANS. The deleveraging that comes with the CCS transaction positions these businesses for success, growth, and value creation. Finally, I would like to thank our team for strong execution.

Speaker #3: The C.C.S . Transaction is ahead of schedule and is now expected to close in the first quarter of 2026 . This is a transformational transaction for that unlocks equity value allows us to return significant cash to our shareholders and strengthens the businesses .

Speaker #3: Additionally , we are encouraged by both the performance and positioning of the Remainco businesses As and ruckus , both businesses exceeded our projections in the quarter , and this performance demonstrates the strong positioning of ruckus and as the deleveraging that comes with the C.C.S .

Speaker #3: Transaction positions these businesses for success , growth and value creation . Finally , I would like to thank our team for strong execution .

Speaker #3: The hard work and dedication of our team with strong support of our equity holders , debt holders , customers and suppliers has driven strong results and positioned all of our businesses for future success .

Chuck Treadway: The hard work and dedication of our team, with strong support of our equity holders, debt holders, customers, and suppliers, has driven strong results and positioned all of our businesses for future success. We will now open the line for questions.

Speaker #3: And with that , we'll now open the line for questions . .

Speaker #1: As a reminder to ask a question , please press star one . One on your telephone and wait for your name to be announced .

Operator: As a reminder to ask a question, please press STAR on your telephone and wait for your name to be announced. To withdraw your question, please press STAR 11. Again, please stand by while we compile the Q&A roster. Our first question comes from Simon Leopold with Raymond James. Your line is open.

Speaker #1: To withdraw your question , please press Star one . One again . Please stand by while we compile the Q&A roster . Our first question comes from Simon Leopold with Raymond James .

Speaker #1: Your line is open .

Speaker #5: Thanks for taking the question . First , maybe , maybe , hopefully an easier one . Is could you I understand you can't quantify the special dividend , but could you help us understand the criteria and how how the board may think about it ?

[Analyst]: Thanks for taking the question. Hopefully an easy one is could you, I understand you can't quantify the special dividend, but could you help us understand the criteria and how the board may think about it? You did offer some, I think, encouraging comments on the Ruckus outlook for 2026. I was less clear how you're thinking about ANS trends specifically for 2026. You did mention, I think, down sequential on some seasonal patterns, but wondering about how that's setting up. Thank you.

Speaker #5: And then you did offer some I think , encouraging comments on the ruckus outlook for 26 . I was less clear how you're thinking about as trends specifically for 26 .

Speaker #5: You did mention , I think down sequential on some seasonal patterns , but wondering about how that's setting up . Thank you .

Speaker #4: Yeah , I'll take I'll take your first one . Simon . You know , relative to the dividend , you know , as you can expect , you know , when we close the transaction , which we now are indicating that that will happen in the first quarter , you know , the board will take into account , you know , all the relevant factors that you would expect them to take into account .

Kyle Lorentzen: I'll take your first one, Simon. Relative to the dividend, as you can expect, when we close the CCS transaction, which we now are indicating will happen in the first quarter, the board will take into account all the relevant factors that you would expect them to take into account. What's our cash position at the time, business performance. I don't think there's anything specific. I think it's a combination of things that they'll look at to determine what's the right level of dividend to do at the time.

Speaker #4: You know , what's our cash position at the time ? You know , business performance . You know , I don't think there's anything specific .

Speaker #4: I think it's a combination of things that they'll look at to determine , you know , what's the right level of dividend to do at the time .

Speaker #4: .

Speaker #3: And to answer your second part of your question , Simon , is , look , we're seeing some resurgence in Docsis upgrade activity .

Chuck Treadway: To answer your second part of your question, Simon, look, we're seeing some resurgence in DOCSIS upgrade activity. Comcast, as you know, is moving forward with FDX and they're doing that at expected, I'd say better than expected levels. Overall, we're seeing a general uptick in DOCSIS for 2026. As we talked about in the call, 2025 was a strong rebound and moving forward we see this business with modest growth and strong cash flow generation. We see the growth coming from new products and as you mentioned, it's a decline in our legacy products. I think that would be the way I'd size it up.

Speaker #3: You know , Comcast , as you know , is moving forward with FDX . And they're doing that at expected . I'd say better than expected levels .

Speaker #3: And I'd say overall we're seeing a general uptick in Docsis for 2026 . And as you as we talked about in the call , you know , 2025 was a strong rebound .

Speaker #3: And we , you know , moving forward , we see this business with modest growth . And strong cash flow generation . We see the growth coming from new products .

Speaker #3: And as you mentioned , you know , it's a decline in our legacy products . I think that would be the way I'd size it up .

Speaker #5: Thank you .

Massimo DiSabato: Thank you.

Speaker #1: Thank you . Our next question comes from Sumit Chatterjee with J.P. Morgan . Your line is open .

Operator: Thank you. Our next question comes from Samik Chatterjee with JPMorgan. Your line is open.

Speaker #6: Hi . Thanks for taking my questions . And I have a couple maybe just on the Docsis upgrades and the record amplifier shipments that you're seeing .

[Analyst]: Hi, thanks for taking my questions. I have a couple maybe just on the DOCSIS upgrades and the record amplifier shipments that you're seeing. I know you talked about sort of customers coming in better than expected at this point, but how should we think about sort of where you are in the cycle? What visibility are customers giving you in terms of their upgrade plans into next year? Just trying to get sort of more bookends around like is this going to be a few quarters or do you see a longer cycle just because of also BEAD coming in to sort of support this in 2026? How should we think about that? If you can help. Thank you. I have a follow up.

Speaker #6: I know you talked about sort of customers coming in better than expected at this point , but how should we think about sort of where you are in the cycle ?

Speaker #6: What visibility are customers giving you in terms of their upgrade plans into next year ? Just trying to get of more bookings around , like , is this going to be a few quarters or do you see a longer cycle just because of also beat coming in to sort of support this in 2026 ?

Speaker #6: How should we think about that if you can help ? Thank you . And I have a follow up .

Speaker #3: Sure . I would say we're in the early innings of Docsis upgrade , you know , and I think this is a multiyear , several year process .

Kyle Lorentzen: Sure.

Chuck Treadway: I would say we're in the early innings of the DOCSIS upgrade. I think this is a multi-year, several year process to put it in perspective, and we're in the very early innings.

Speaker #3: To put it in perspective . And we're in the very early innings .

Speaker #6: Okay . Okay , great . And in relation to maybe just a follow up on that , you did expect you had earlier outlined in is to moderate a bit into the quarter .

[Analyst]: Okay, great. In relation to maybe just to follow up on that, you did expect, you had earlier outlined ANS to moderate a bit into the quarter. I mean, the upside surprise that you saw was just overall amplifier shipments, or was there a software pull in as well along with it driving the upside?

Speaker #6: I mean , the upside surprise that you saw was just overall amplifier shipments . Or was there a software pull in as well along with it driving the upside ?

Speaker #4: Yeah , I think there's in the in the quarter , there was no real software impact in the quarter . I think we had indicated , you know , on a sequential basis , that the Ans business was going to be down on an EBITDA basis , driven by , you know , a really , really strong second quarter that we had that was impacted by the software .

Kyle Lorentzen: Yeah, I think in the quarter there was no real software impact in the quarter. I think we had indicated.

Kyle Lorentzen: You know, on a sequential basis, the ANS business was going to be down on an EBITDA basis driven by a really, really strong second quarter that we had that was impacted by the software. As we went into Q3, it was more of a hardware mix for us, which drove the sequential decline, albeit still a pretty solid quarter for ANS.

Speaker #4: You know , so as we , you know , as we went into Q3 , you know , it was more of a hardware , you know , mix for us , which drove the sequential decline , albeit , you know , you know , still a pretty solid quarter for ans .

Speaker #6: Okay . And maybe if you can let me squeeze one more in here . Just trying to think about the EBITDA for the Remainco .

[Analyst]: Okay, maybe if you can let me squeeze one more in here. Just trying to think about the EBITDA for the RemainCo and how should we think about maybe a bit more of a walk between the EBITDA and what should be a more normalized cash flow for the RemainCo business? What would you sort of call out in terms of capital investments to support the business on an ongoing basis? How should we think about sort of normalized cash flow?

Speaker #6: And how should we think about maybe a bit more of a walk between EBITDA and what should be a more normalized cash flow for the Remainco business ?

Speaker #6: What would you sort of call out in terms of capital investments to support the business on an ongoing basis , and how should we think about sort of normalized cash flow ?

Speaker #4: Yeah , I mean , we obviously we've provided some indication on what at least the 25 Remainco EBITDA guidepost would be at the 350 to $375 million .

Kyle Lorentzen: Yeah, I mean obviously we've provided some indication on what at least the 2025 RemainCo EBITDA guidepost would be at the $350 to $375 million. I think when we look at that, look at the RemainCo businesses, I think working capital and taxes are sort of, would be sort of normal. I think the one place where we probably see a little bit of pickup from a cash flow basis versus the total CommScope would be in CapEx. These businesses tend to be less capital intensive than the CCS business, and then ultimately, to get to the actual cash flow number, as we've talked about in our prepared remarks and the proxy, whatever leverage we would put on the business would clearly have some impact on the cash flow, which we'll determine once we get to the CCS transaction and the leverage amount we'll put on the business.

Speaker #4: You know , I think when we , you know , look at that , you know , look at the Remainco businesses , you know , I think , you know , working capital and and , you know , sort of taxes are sort of would be sort of normal .

Speaker #4: You know , I think the one place , you know , where we'd probably see a little bit of , of pickup from a cash flow basis versus the , you know , the , the , the total commscope would be in CapEx .

Speaker #4: These businesses tend to be less capital intensive than the business , you know , and then ultimately , you know , to get to the actual cash flow number , you know , as we've talked about in our prepared remarks and , and and the proxy , you know , you know , the whatever leverage we would put on the business , would , you know , clearly have some impact on the cash flow , which will determine , you know , once we get to the C.C.S .

Speaker #4: Transaction and the leverage amount we'll put on the business .

Speaker #6: Okay . Great . Thank you . Thanks for taking my questions .

[Analyst]: Great, thank you. Thanks for taking my questions.

Speaker #1: Thank you . As a reminder to ask a question , please press star one one on your telephone . Again , that is star one one to ask a question .

Operator: Thank you. As a reminder to ask a question, please press Star 11 on your telephone. Again, that is Star 11 to ask a question. Our next question comes from Kevin Niederpum with Bank of America. Your line is open.

Speaker #1: Our next question comes from Kevin Needham with Bank of America . Your line is open .

Speaker #7: Hey guys . Good morning . I got a few questions for you , but my first question is similar to Sam , but it is about the Wi-Fi business .

[Analyst]: Hey guys, good morning. I got a few questions for you. My first question is similar to Samik's, but it's about the Wi-Fi business. Can you explain with us and share with us where you currently view the Wi-Fi 7 cycle?

Speaker #7: Can you explain with us and share with us where you currently view the Wi-Fi seven cycle ?

Speaker #3: Sure , sure . I would say our our inventory issues are behind us at this point . I mean , as you see that , you know , the Q3 revenue was up 15% year over year .

Chuck Treadway: Sure. I would say our inventory issues are.

Chuck Treadway: Behind us at this point.

Chuck Treadway: I mean, as you see that the Q3 revenue was up 15% year over year. What's really driving all this are our.

Chuck Treadway: New products and solutions.

Chuck Treadway: I think we're gaining traction with our Ruckus One product line, and I'd say that includes the subscriptions. We are seeing a Wi-Fi refresh, and I would say we're in the early innings of that. I would say, in general, strong market conditions, specifically.

Chuck Treadway: With four access points.

Chuck Treadway: The other thing that's going on in our business is we're investing approximately $20 million a year in incremental SAL resources, and we started that this year. These resources, combined with our new products and our vertical market initiatives, focus on Ruckus One subscriptions, and I would say some channel initiatives are going to support revenue growth. I believe that's going to be like a two times market growth rate over the next several years.

[Analyst]: Got it, thank you. My next question is more about the ANS segment this quarter and a little bit of last quarter. You called out more of these FDX smart amplifiers driving growth. Are you able to give us some information on the CMTs, the nodes, or any of the other stuff in between, how that performed throughout the quarter?

Kyle Lorentzen: Yeah, I think as we think about, you know, sort of a little bit of a different question. On the node and RPD side, we see continued strength there as well, particularly FDX side of the business. I think as Chuck mentioned in one of the earlier answers, on the legacy CMTF side, that is a declining business and we'll see that slowly decline over time. I think on the virtual CMTF side, as we've talked about in the last couple calls, we're gaining some traction there. We've had a couple of wins, particularly in Europe.

[Analyst]: Got it, thank you. My last question is more broad, but based around competition. Can you parse out for us the competition and more the players that you're seeing in both the ANS side and the Ruckus side?

Chuck Treadway: On the ANS side, there's a wide range of, let's say, smaller players or, you know, niche players. I think you think about like a Telesta, you think about a Bessema. When you think about the larger players, more larger than those guys, you think about Harmonic, and then you got ATX. Those would be the players in that space. What was your other question?

[Analyst]: Is the competition on Ruckus?

Chuck Treadway: Yeah, I mean that would be, you know, Cisco, HP, Juniper, Extreme. That would be the ones I'd call out. Arista.

Kyle Lorentzen: Yeah. The only thing I would comment around competition is in the ANS business. It's very product specific. We are one of the few companies that supply into the DOCSIS space, sort of all the products, and each product has a different set. Like your amplifiers would have different competitors than your CMTs. I also think when you look at the Ruckus business, we are heavily weighted to enterprise. We're more heavily weighted to access points. Even when you get into the businesses, a lot of it has to do with being product specific or market specific. I think generally on a broad basis, Chuck hit the major competitors that we're seeing.

[Analyst]: Great, thank you very much.

Operator: Thank you. Our next question comes from George Nodder with Wolfe Research. Your line is open.

[Analyst]: Hi, this is Brendan on for George. Wanted to ask a question about the 2025 EBITDA guide. It looks like you guys raised the guidance for the core RemainCo business, but any color on what you expect for CCS to do next quarter? I think some of the guidance raised in the RemainCo was maybe offset by CCS. Possibly anything there would be awesome.

Kyle Lorentzen: Yeah, I think we mentioned in our prepared remarks that just based on some seasonality, albeit still a very strong quarter for CCS, the CCS EBITDA at this point in time, we'd call it down a little bit, but again, not necessarily from strength of market, more just from Q4 seasonally being a little bit of a softer quarter for us historically.

[Analyst]: Great, thanks.

Operator: Thank you. I'm showing no further questions at this time. I would now like to turn it back to Chuck Treadway, President and Chief Executive Officer, for closing remarks.

Chuck Treadway: Yes, thank you all for your time today. I appreciate your interest in CommScope and I'd like to wish all of you a great rest of your week.

Thank you. I'm showing no further questions at this time. Oh, now, I like to turn it back to Chuck. Treadway, president and chief executive officer for closing remarks.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Yes. Thank you all for your time today. Uh, I appreciate your interest in commscope and I'd like to wish all of you a great rest of your week.

This concludes today's conference call.

Thank you for participating. You may now. Disconnect

[Analyst]: SA SA.

Mhm.

oh,