Q4 2025 Clearfield Inc Earnings Call

November 25, 2025

Cheryl P. Beranek: Good day, and welcome to the Clearfield Fiscal Fourth Quarter 2025 Conference Call. All participants are in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. At this time, I'd like to turn the floor over to Gregory McNiff, Investor Relations. Sir, please go ahead.

Operator: Good day, and welcome to the Clearfield Fiscal Fourth Quarter 2025 Conference Call. All participants are in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. At this time, I'd like to turn the floor over to Gregory McNiff, Investor Relations. Sir, please go ahead.

Timothy Paul Savageaux: Thank you. Joining me on today's call are Sherry Beranek, Clearfield's President and CEO, and Dan Herzog, Clearfield CFO. As a reminder, Clearfield publishes a quarterly shareholder letter, which provides an overview of the company's financial results, operational highlights, and future outlook. You can find both the shareholder letter and the earnings release on Clearfield's Investor Relations website. After brief prepared remarks, we will open the floor for a question-and-answer session. Please note that during this call, management will be making remarks regarding future events and the future financial performance of the company. These remarks constitute forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements.

Gregory McNiff: Thank you. Joining me on today's call are Cheri Beranek, Clearfield's President and CEO, and Dan Herzog, Clearfield CFO. As a reminder, Clearfield publishes a quarterly shareholder letter, which provides an overview of the company's financial results, operational highlights, and future outlook. You can find both the shareholder letter and the earnings release on Clearfield's Investor Relations website. After brief prepared remarks, we will open the floor for a question-and-answer session. Please note that during this call, management will be making remarks regarding future events and the future financial performance of the company. These remarks constitute forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements.

Timothy Paul Savageaux: It is important to also note that the company undertakes no obligation to update such statements except as required by law. The company cautions you to consider risk factors that could cause actual results to differ materially from those in the forward-looking statements contained in today's press release, shareholder letter, and on this conference call. The risk factors section in Clearfield's most recent Form 10-K filing with the Securities and Exchange Commission, and its subsequent filings on Form 10-Q, provide a description of these risks. Additionally, as announced on 12 November 2025, Clearfield has sold its Nestor Cables business. Following the divestiture of Nestor, we are reporting only on the Clearfield segment. Beginning with this release, Clearfield is reflected as continuing operations, with Nestor classified as discontinued operations and held for sale for fiscal 2025 and all prior periods on our financials.

It is important to also note that the company undertakes no obligation to update such statements except as required by law. The company cautions you to consider risk factors that could cause actual results to differ materially from those in the forward-looking statements contained in today's press release, shareholder letter, and on this conference call. The risk factors section in Clearfield's most recent Form 10-K filing with the Securities and Exchange Commission, and its subsequent filings on Form 10-Q, provide a description of these risks. Additionally, as announced on 12 November 2025, Clearfield has sold its Nestor Cables business. Following the divestiture of Nestor, we are reporting only on the Clearfield segment. Beginning with this release, Clearfield is reflected as continuing operations, with Nestor classified as discontinued operations and held for sale for fiscal 2025 and all prior periods on our financials.

Timothy Paul Savageaux: With that, I would like to turn the call over to Clearfield's President and CEO, Sherry Beranek. Sherry.

With that, I would like to turn the call over to Clearfield's President and CEO, Cheri Beranek. Cheri.

Scott Wallace Searle: Good morning, everyone, and thank you for joining us to discuss Clearfield's fourth quarter and full-year fiscal 2025 results. I'll begin with a brief overview of the quarter, discuss our decision to divest the Nestor business, share updates on our long-term strategy, and then turn the call over to Dan for a summary of our financial performance and outlook for fiscal 2026. Fourth quarter net sales from Clearfield's continuing operations of $41.1 million were up 13% year over year. For the full year, Clearfield's continuing operations net sales grew 20% to $150 million, demonstrating solid execution as we continue to focus on growing faster than the industry and driving market share gains. After a thorough and comprehensive review of the Nestor segment, we made the decision to divest the business. This move allows us to redeploy resources toward our core North American operations and higher return opportunities.

Cheri Beranek: Good morning, everyone, and thank you for joining us to discuss Clearfield's fourth quarter and full-year fiscal 2025 results. I'll begin with a brief overview of the quarter, discuss our decision to divest the Nestor business, share updates on our long-term strategy, and then turn the call over to Dan for a summary of our financial performance and outlook for fiscal 2026. Fourth quarter net sales from Clearfield's continuing operations of $41.1 million were up 13% year over year. For the full year, Clearfield's continuing operations net sales grew 20% to $150 million, demonstrating solid execution as we continue to focus on growing faster than the industry and driving market share gains. After a thorough and comprehensive review of the Nestor segment, we made the decision to divest the business. This move allows us to redeploy resources toward our core North American operations and higher return opportunities.

From those forward-looking statements contained in today’s press release, shareholder letter, and on this conference call, the risk factor section in Clearfield’s most recent Form 10-K filing with the Securities and Exchange Commission and its subsequent filings on Form 10-Q. Provide a description of these risks. Additionally, as announced on November 12, 2025, Clearfield has sold its Nestor Cables business. Following the divestiture of Nestor, we are reporting only on the Clearfield segment. Beginning with this release, Clearfield is reflected as continuing operations with Nestor classified as discontinued operations and held for sale for fiscal 2025 and all prior periods on our financials. With that, I would like to turn the call over to Clearfield’s President and CEO, Cheryl Beranek.

25 results.

I'll begin with a brief overview of the quarter and discuss our decision to divest the Nester business.

Share updates on our long-term strategy and then turn the call over to Dan for a summary of our financial performance and outlook for fiscal 2026.

Fourth quarter net sales from Clearfield's continuing operations of $41.1 million were up 13% year-over-year.

For the full year, Clearfield's continuing operations net sales grew 20% to $150 million, demonstrating solid execution as we continue to focus on growing faster than the industry and driving market share gains.

After a thorough and comprehensive review of the Nester segment, we made the decision to digest the business.

Scott Wallace Searle: Our acquisition of Nestor was focused on gaining access to a key technology, namely the ability to manufacture our own line of Field Shield Cable, and we achieved our objective. We strengthened our vertical integration and Build America Buy America compliance through the successful transfer of cable manufacturing technology into our US and Mexico facilities. However, expanding Nestor's business beyond Finland into the European market proved to be a lower margin opportunity, despite our efforts to improve margins through process improvements and new product introductions, resulting in a suboptimal use of capital. The transaction resulted in a $10.4 million non-cash write-down in the fourth quarter with minimal cash impact. Importantly, the operational benefits for Nestor's integration remain embedded in our manufacturing platform. This divestiture sharpens our focus, improves our long-term margin profile, and better aligns resources with Clearfield's strategic priorities.

Our acquisition of Nestor was focused on gaining access to a key technology, namely the ability to manufacture our own line of Field Shield Cable, and we achieved our objective. We strengthened our vertical integration and Build America Buy America compliance through the successful transfer of cable manufacturing technology into our US and Mexico facilities. However, expanding Nestor's business beyond Finland into the European market proved to be a lower margin opportunity, despite our efforts to improve margins through process improvements and new product introductions, resulting in a suboptimal use of capital. The transaction resulted in a $10.4 million non-cash write-down in the fourth quarter with minimal cash impact. Importantly, the operational benefits for Nestor's integration remain embedded in our manufacturing platform. This divestiture sharpens our focus, improves our long-term margin profile, and better aligns resources with Clearfield's strategic priorities.

This move allows us to redeploy resources toward our core North American operations and higher return opportunities.

Our acquisition of Nestor was focused on gaining access to a key technology, namely the ability to manufacture our own line of field shield cable, and we achieved our objective.

We strengthened our vertical integration and built America. Buy America compliance through the successful transfer of cable manufacturing technology into our U.S. and Mexico facilities.

However, expanding Nester's business beyond Finland into the European market proved to be a lower-margin opportunity. Despite our efforts to improve margins through process improvements and new product introductions, we experienced a suboptimal use of capital.

The transaction resulted in a $10.4 million non-cash write-down in the fourth quarter, with minimal cash impact. Importantly, the operational benefits from the Nestors integration remain embedded in our manufacturing platform.

Scott Wallace Searle: Looking ahead, our focus remains on protecting what defines Clearfield: craftsmanship, reliability, and service, while leveraging our core strengths and expanding into areas where we can create the most value. We continue to execute on our Better Broadband and Beyond strategy through three core pillars: protecting our core community broadband business by ensuring that the broadband service providers who have long relied on Clearfield continue to have the products, service, and support they need to succeed, leveraging our market position into new applications and environments where fiber connectivity plays a growing role, including next-generation wireless networks from the metro core to the cell site, and expanding into adjacent markets by utilizing our core competencies to allow us to reach new customers and to strengthen our leadership in broadband fiber infrastructure.

Looking ahead, our focus remains on protecting what defines Clearfield: craftsmanship, reliability, and service, while leveraging our core strengths and expanding into areas where we can create the most value. We continue to execute on our Better Broadband and Beyond strategy through three core pillars: protecting our core community broadband business by ensuring that the broadband service providers who have long relied on Clearfield continue to have the products, service, and support they need to succeed, leveraging our market position into new applications and environments where fiber connectivity plays a growing role, including next-generation wireless networks from the metro core to the cell site, and expanding into adjacent markets by utilizing our core competencies to allow us to reach new customers and to strengthen our leadership in broadband fiber infrastructure.

This divestiture sharpens, our Focus improves, our long-term margin profile and better aligns Resources with clear Fields, strategic priorities.

Looking ahead. Our Focus remains on protecting what defines Clearfield? Craftsmanship. Reliability and service. While leveraging, our core strengths and expanding into areas where we can create the most value.

We continue to execute on our better broadband and Beyond strategy. Through 3 core pillars

Protecting our core community broadband business by ensuring that the broadband service providers who have long relied on Clearfield continue to have the products, service, and support they need to succeed.

Leveraging our market position into new applications and environments where fiber connectivity plays a growing role, including next-generation wireless networks from the metro core to the cell site.

Scott Wallace Searle: As hyperscalers rely on smaller ISPs to push part of their compute workloads closer to the edge, Clearfield's position with regional providers opens up a new growth vehicle to the company. This disciplined approach positions Clearfield for measured growth as the market continues to recover. As part of this next phase, Clearfield will introduce two significant new product lines. In the first quarter of calendar 2026, we will launch a complete line of splice cases, expanding our offering and deepening engagement with customers who operate in environments that require splicing. After extensive review and months of successful field demonstration, we believe this new solution represents the best in class. Following that product introduction, we will release a next-generation fiber management cassette optimized for non-hyperscale data centers, a fast-growing market where Clearfield's modular design and innovation provide a unique advantage.

As hyperscalers rely on smaller ISPs to push part of their compute workloads closer to the edge, Clearfield's position with regional providers opens up a new growth vehicle to the company. This disciplined approach positions Clearfield for measured growth as the market continues to recover. As part of this next phase, Clearfield will introduce two significant new product lines. In the first quarter of calendar 2026, we will launch a complete line of splice cases, expanding our offering and deepening engagement with customers who operate in environments that require splicing. After extensive review and months of successful field demonstration, we believe this new solution represents the best in class. Following that product introduction, we will release a next-generation fiber management cassette optimized for non-hyperscale data centers, a fast-growing market where Clearfield's modular design and innovation provide a unique advantage.

Expanding into adjacent markets. By utilizing our core competencies to allow us to reach new customers and to strengthen our leadership and Broadband, fiber infrastructure,

As hyperscalers rely on smaller ISPs to push part of their compute workloads closer to the edge, Clearfield's position with regional providers opens up a new growth vehicle for the company.

This disciplined approach positions Clearfield for measured growth as the market continues to recover.

As part of this next phase, Clearfield will introduce two significant new product lines.

In the first quarter of calendar 2026, we will launch a complete line of splice cases, expanding our offering and deepening engagement with customers who operate in environments that require splicing.

After extensive review and months of successful field demonstration, we believe this new solution represents the best-in-class.

Scott Wallace Searle: These launches mark the start of a new generation of innovation as we extend our reach within and beyond traditional broadband markets. Another important element of our strategy is investing in sales development and expanding our distribution channels. We have enhanced our leadership team to support the new phase of growth. Anise Kanakam, our new Chief Commercial Officer, is integrating sales and marketing to align go-to-market strategy with product innovation. Mike Ward, who recently joined as our new Vice President of Broadband Sales, and Mark Temple, who joined as Vice President of Distribution Channels and Strategic Alliances, bring deep industry experience, and will strengthen our Tier 1 and channel sales capabilities. Together, these leaders bring renewed focus, operational rigor, and energy to the organization, positioning Clearfield for the next chapter of growth.

These launches mark the start of a new generation of innovation as we extend our reach within and beyond traditional broadband markets. Another important element of our strategy is investing in sales development and expanding our distribution channels. We have enhanced our leadership team to support the new phase of growth. Anise Kanakam, our new Chief Commercial Officer, is integrating sales and marketing to align go-to-market strategy with product innovation. Mike Ward, who recently joined as our new Vice President of Broadband Sales, and Mark Temple, who joined as Vice President of Distribution Channels and Strategic Alliances, bring deep industry experience, and will strengthen our Tier 1 and channel sales capabilities. Together, these leaders bring renewed focus, operational rigor, and energy to the organization, positioning Clearfield for the next chapter of growth.

Following that product introduction, we will release a Next Generation fiber management cassette optimized for non-hyperscale data centers, a fast-growing market where Clearfield's modular design and innovation provide a unique advantage.

These launches marked the start of a new generation of innovation as we extend our reach within and Beyond traditional Broadband markets.

Another important element of our strategy is investing in sales development and expanding our distribution channels.

We have enhanced our leadership team to support the new phase of growth.

And these, Kanakam, our new Chief Commercial Officer, is integrating sales and marketing to align the go-to-market strategy with product innovation.

Recently joined as our new vice president of broadband sales and Mark Temple, who joined as vice president of distribution channels and strategic alliances bring deep industry experience and will strengthen our Tier 1 and channel sales capabilities.

Scott Wallace Searle: With respect to our distribution channels, our long-standing partners remain essential contributors to our success, connecting Clearfield solutions to broadband service providers. Building on that strong foundation, we recently added WireMasters as a distribution partner, who has begun to distribute Clearfield's fiber optic connectivity and management products globally, with an emphasis on the defense and aerospace markets. We plan to add a wireless-focused distributor early in fiscal 2026, opening new opportunities in cellular backhaul and emerging edge applications. These efforts strengthen our access to new customer groups while maintaining close collaboration with new, existing partners, who continue to be key to our growth. I want to briefly comment on the BEAD program. We are pleased that 18 of the 52 submitted proposals have been approved by the NTIA. Fiber remains the overwhelming medium to delivering broadband based on the proposal submitted.

With respect to our distribution channels, our long-standing partners remain essential contributors to our success, connecting Clearfield solutions to broadband service providers. Building on that strong foundation, we recently added WireMasters as a distribution partner, who has begun to distribute Clearfield's fiber optic connectivity and management products globally, with an emphasis on the defense and aerospace markets. We plan to add a wireless-focused distributor early in fiscal 2026, opening new opportunities in cellular backhaul and emerging edge applications. These efforts strengthen our access to new customer groups while maintaining close collaboration with new, existing partners, who continue to be key to our growth. I want to briefly comment on the BEAD program. We are pleased that 18 of the 52 submitted proposals have been approved by the NTIA. Fiber remains the overwhelming medium to delivering broadband based on the proposal submitted.

Together. These leaders bring renewed Focus, operational rigor and energy to the organization positioning Clearfield for the next chapter of growth.

With respect to our distribution channels, our long-standing partners remain essential contributors to our success, connecting Clearfield solutions to broadband service providers.

Building on that strong foundation, we recently added Wire Masters as a distribution partner. They have begun to distribute Clearfield's fiber optic connectivity and management products globally, with an emphasis on the defense and aerospace markets. Additionally, we plan to add a wireless-focused distributor early in fiscal 2026, opening new opportunities in cellular backhaul and emerging edge applications.

These efforts strengthen our access to new customer groups while maintaining close collaboration with new existing Partners who continue to be key to our growth.

I want to briefly comment on the BEAD program. We are pleased that 18 of the 52 submitted proposals have been approved by the NTIA.

Scott Wallace Searle: We intend to vigorously pursue this opportunity and will keep you updated as we approach the deployment stage. Fiscal year 2025 was a transformational year for Clearfield, one defined by strategic focus, leadership investment, and a return to growth and profitability. As we enter fiscal 2026, we are executing with confidence on our Better Broadband and Beyond strategy, driving innovation across our core markets, while expanding into adjacent opportunities that enhance long-term shareholder value. With that, I'll turn the call over to Dan Herzog, who will review our fourth quarter and full-year results, and provide our outlook for fiscal 2026.

We intend to vigorously pursue this opportunity and will keep you updated as we approach the deployment stage. Fiscal year 2025 was a transformational year for Clearfield, one defined by strategic focus, leadership investment, and a return to growth and profitability. As we enter fiscal 2026, we are executing with confidence on our Better Broadband and Beyond strategy, driving innovation across our core markets, while expanding into adjacent opportunities that enhance long-term shareholder value. With that, I'll turn the call over to Dan Herzog, who will review our fourth quarter and full-year results, and provide our outlook for fiscal 2026.

Fiber Remains the overwhelming medium to delivering Broadband based on the proposal submitted.

We intend to vigorously pursue this opportunity and will keep you updated as we approach the deployment stage.

Fiscal year 25 was a transformational year for Clearfield 1, to find by strategic Focus leadership investment and a return to growth and profitability.

As we enter fiscal 2026, we are executing with confidence on our Better Broadband and Beyond strategy. We are driving innovation across our core markets while expanding into adjacent opportunities that enhance long-term shareholder value.

Timothy Paul Savageaux: Thank you, Sherry, and good morning, everyone. I will now review our fourth quarter results, beginning with sales. This quarter marks the first period in which Nestor's results are classified under discontinued operations on our income statement. As a result, the Clearfield segment now reflects our continuing operations, and all quarter, full-year, and prior period comparisons are now provided on a Clearfield continuing operations-only basis to ensure clarity. Fourth quarter net sales from Clearfield's continuing operations were $41.1 million, up 13% over the same period from $36.2 million in the prior year. Gross margin improved from 26.6% to 34.6%, which was driven by better manufacturing efficiencies and overhead absorption with higher volume. Net income per share from continuing operations was $0.13 in the fourth quarter of fiscal 2025 versus a loss of $0.01 per share in the comparable period last year.

Dan Herzog: Thank you, Cheri, and good morning, everyone. I will now review our fourth quarter results, beginning with sales. This quarter marks the first period in which Nestor's results are classified under discontinued operations on our income statement. As a result, the Clearfield segment now reflects our continuing operations, and all quarter, full-year, and prior period comparisons are now provided on a Clearfield continuing operations-only basis to ensure clarity. Fourth quarter net sales from Clearfield's continuing operations were $41.1 million, up 13% over the same period from $36.2 million in the prior year. Gross margin improved from 26.6% to 34.6%, which was driven by better manufacturing efficiencies and overhead absorption with higher volume. Net income per share from continuing operations was $0.13 in the fourth quarter of fiscal 2025 versus a loss of $0.01 per share in the comparable period last year.

With that, I'll turn the call over to Dan Hrdza, who will review our fourth quarter and full-year results and provide our outlook for fiscal 2026.

Thank you Sherry and good morning everyone.

I will now review our fourth-quarter results, beginning with sales.

this quarter marks, the first period in which nesters results are classified under discontinued operations on our income statements.

As a result, the Clearfield segment now, reflects our continuing operations and all quarter full year. And prior period, comparisons are now provided on a clear field. Continuing operations only basis to ensure clarity

In the fourth quarter, net sales from Clearfield's continuing operations were $41.1 million, up 13% over the same period from $36.2 million in the prior year.

Gross margin improved from 26.6% to 34.6%, which was driven by better manufacturing efficiencies and overhead absorption with higher volume.

Timothy Paul Savageaux: For the full fiscal year, net sales from continuing operations were $150.1 million, up 20% from $125.6 million in fiscal year 2024. Gross margin expanded from 20.6% to 33.7%, mainly as a result of better overhead absorption with higher volume, lower inventory reserve charges as a result of improved inventory utilization, along with increases in production efficiency from our continuous improvement programs. While we reported an overall loss per share for fiscal 2025 of $0.58, Nestor's discontinued operations and our impairment write-down of that business contributed a net loss of $1.03 per share. This was offset by net income per share of $0.45 from Clearfield's continuing operations, which compares to a net loss per share of $0.58 in the comparable period in fiscal 2024. These results underscore the strength of our continuing operations moving forward, which continue to demonstrate solid execution and share gains.

For the full fiscal year, net sales from continuing operations were $150.1 million, up 20% from $125.6 million in fiscal year 2024. Gross margin expanded from 20.6% to 33.7%, mainly as a result of better overhead absorption with higher volume, lower inventory reserve charges as a result of improved inventory utilization, along with increases in production efficiency from our continuous improvement programs. While we reported an overall loss per share for fiscal 2025 of $0.58, Nestor's discontinued operations and our impairment write-down of that business contributed a net loss of $1.03 per share. This was offset by net income per share of $0.45 from Clearfield's continuing operations, which compares to a net loss per share of $0.58 in the comparable period in fiscal 2024. These results underscore the strength of our continuing operations moving forward, which continue to demonstrate solid execution and share gains.

Net income per share from continuing operations was $0.13 in the fourth quarter of fiscal 2025, versus a loss of $0.01 per share in the comparable period last year.

For the full fiscal year, net sales from continuing operations were $150.1 million, up 20% from $125.6 million in fiscal year 2024.

Gross margin expanded from 20.6% to 33.7%, mainly as a result of better overhead absorption with higher volume.

Lower inventory Reserve charges as a result of improved inventory. Utilization along with increases in production efficiency from our continuous Improvement programs.

While we reported an overall loss per share for fiscal 2025 of $0.58, the discontinued operations of Nesters and our impairment of that business contributed a net loss of $13 per share.

This was offset by net income per share of $0.45 from Clearfield's continuing operations.

Which compares to a net loss per share of $0.58 in the comparable period in fiscal 2024.

Timothy Paul Savageaux: We ended the quarter with approximately $166 million in cash and investments, up from $153 million in the prior year, reflecting continued strength in our balance sheet and disciplined operational execution. This financial position enables us to invest in innovation, product development, and market expansion programs that will drive long-term value creation. The company also invested $16.5 million in repurchasing 551,000 shares during the fiscal year. In addition, our board of directors has increased our share buyback authorization from $65 million to $85 million, providing us with $28.4 million available for additional repurchases when added to the $8.4 million repurchase amount remaining on 30 September 2025. For the full year, fiscal 2026, we expect net sales from continuing operations in the range of $160 to 170 million. We expect growth to be driven by steady demand for fiber connectivity, with continued strength across our large regional and MSO customers.

We ended the quarter with approximately $166 million in cash and investments, up from $153 million in the prior year, reflecting continued strength in our balance sheet and disciplined operational execution. This financial position enables us to invest in innovation, product development, and market expansion programs that will drive long-term value creation. The company also invested $16.5 million in repurchasing 551,000 shares during the fiscal year. In addition, our board of directors has increased our share buyback authorization from $65 million to $85 million, providing us with $28.4 million available for additional repurchases when added to the $8.4 million repurchase amount remaining on 30 September 2025. For the full year, fiscal 2026, we expect net sales from continuing operations in the range of $160 to 170 million. We expect growth to be driven by steady demand for fiber connectivity, with continued strength across our large regional and MSO customers.

These results underscore the strength of our continuing operations moving forward which continued to demonstrate solid execution and share gains.

We ended the quarter with approximately $166 million in cash and investments, up from $153.39 million.

Product and market expansion programs that will drive long-term value creation.

The company also invested $16.5 million in repurchasing 551,000 shares during the fiscal year.

In addition, our board of directors has increased our share buyback authorization from 65 million to 85 million, providing us with $28.4 million available for additional repurchases.

When added to the $8.4 million Reef purchase amount remaining on September 30, 2025.

For the full year fiscal 2026. We expect net sales from continuing operations in the range of 160 to 170 million.

Timothy Paul Savageaux: We expect the late start to the BEAD program and the recent government shutdown to pressure investments both from private funding, as well as government programs, in our community broadband market early in the year. We expect operating expenses as a percentage of revenue to remain consistent with fiscal 2025, and earnings per share from continuing operations in the range of $0.48 to $0.62. For the first fiscal quarter of 2026, we anticipate net sales from continuing operations in the range of $30 million to $33 million. Total operating expenses remain consistent with the fiscal fourth quarter of 2025, and net loss per share in the range of $0.08 to break even. The earnings per share ranges are based on the number of shares outstanding at the end of the fourth quarter and do not reflect potential share repurchases completed.

We expect the late start to the BEAD program and the recent government shutdown to pressure investments both from private funding, as well as government programs, in our community broadband market early in the year. We expect operating expenses as a percentage of revenue to remain consistent with fiscal 2025, and earnings per share from continuing operations in the range of $0.48 to 0.62. For the first fiscal quarter of 2026, we anticipate net sales from continuing operations in the range of $30 to 33 million. Total operating expenses remain consistent with the fiscal fourth quarter of 2025, and net loss per share in the range of $0.08 to break even. The earnings per share ranges are based on the number of shares outstanding at the end of the fourth quarter and do not reflect potential share repurchases completed.

We expect growth to be driven by steady demand for 5G connectivity, with continued strength across our large regional and MSO customers.

We expect the late start to the BEAD program and the recent government shutdown to pressure investments, both from private funding as well as government programs, in our community broadband market early in the year.

We expect operating expenses as a percentage of revenue to remain consistent with fiscal 2025.

And earnings per share from continuing operations in the range of $0.48 to $0.62.

For the first fiscal quarter of 2026, we anticipate net sales from continuing operations in the range of $30 million to $33 million.

Total operating expenses remain consistent with the fiscal fourth quarter of 2025.

And net loss per share is expected to be in the range of $0.08 to break even.

Timothy Paul Savageaux: With that, we will open the call to your questions.

With that, we will open the call to your questions.

The earnings per share ranges are based on the number of shares outstanding at the end of the fourth quarter and do not reflect potential share repurchases completed.

And with that, we will open the call to your questions.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question today comes from Ryan Koontz with Needham & Company. Please go ahead.

We will now begin the question and answer session.

To ask a question, you may press star, then 1, on your touchtone phone.

If you are using a speakerphone, please pick up your handset before pressing the keys.

if at any time your question has been addressed and you would like to withdraw your question, please press star then 2

At this time, we will pause momentarily to assemble our roster.

Ryan Boyer Koontz: Great. Thanks. Good morning. I wanted to ask about your comments about the shutdown. Obviously, it may be some impacts on BEAD here, but were there other programs, subsidy programs, or customer behaviors you could point to that might have impacted either revenue or bookings, or your outlook for Q4? Sorry, your fiscal Q1?

Ryan Koontz: Great. Thanks. Good morning. I wanted to ask about your comments about the shutdown. Obviously, it may be some impacts on BEAD here, but were there other programs, subsidy programs, or customer behaviors you could point to that might have impacted either revenue or bookings, or your outlook for Q4? Sorry, your fiscal Q1?

The first question today comes from Ryan Coons with Nem and Co. Please go ahead.

Great, thanks. Good morning. Um, wanted to ask about, uh, your comments about the shutdown. Um, obviously it may be some impacts on on B, tier, but were there other programs subsidy programs, or, or customer behaviors? You can point to, um,

That might have impacted, you know, either revenue or, or bookings, or your outlook for Q4.

Cheryl P. Beranek: Right. Yeah. Good morning, Ryan. We saw it in everything kind of across the board, probably ACAM, probably the most affected. Not that it's going to diminish the amount of money available, but it did affect bookings in fourth quarter that would then, both because of our short lead times, both ship in fourth quarter and lead into first. It's an unfortunate circumstance and one of those things that I guess we all don't even realize how much government funding and government operation affect us.

Cheri Beranek: Right. Yeah. Good morning, Ryan. We saw it in everything kind of across the board, probably ACAM, probably the most affected. Not that it's going to diminish the amount of money available, but it did affect bookings in fourth quarter that would then, both because of our short lead times, both ship in fourth quarter and lead into first. It's an unfortunate circumstance and one of those things that I guess we all don't even realize how much government funding and government operation affect us.

Um, I'm sorry your, your fiscal q1. Right. Um, yeah, good morning, Ryan the, um, I we saw it in in everything, um, you know, kind of a crash, the board probably, um, you know, a chem probably the most effective, you know, not that it's going to, um, diminish the amount of money available, but it did affect, um, bookings. Um, you know, end of in in fourth quarter that would then, um, both because of a short lead time, both ship and fourth quarter and lead into first. Um, so it's you know, an unfortunate circumstance and 1 of those things that you know, I guess we all don't even realize how much um Government funding and government operation affect us.

Ryan Boyer Koontz: Sherry, do you have a kind of a timeline when you expect that to catch up to normal? I would think maybe over the next few quarters, or is it just a?

Ryan Koontz: Cheri, do you have a kind of a timeline when you expect that to catch up to normal? I would think maybe over the next few quarters, or is it just a?

Char, do you have a kind of a

Cheryl P. Beranek: Oh, yeah. We'll be back to normal by second quarter as it relates to the government shutdown. The government shutdown did affect bookings and our forecast for a soft first quarter into next year, but I don't expect it to affect the total year. Second quarter, we should be normalized.

Cheri Beranek: Oh, yeah. We'll be back to normal by second quarter as it relates to the government shutdown. The government shutdown did affect bookings and our forecast for a soft first quarter into next year, but I don't expect it to affect the total year. Second quarter, we should be normalized.

Or is it just a oh, yeah, we'll be, we'll be back to normal by by second quarter as it relates to the, the government shutdown. Um, so the government shutdown did, um, affect, you know, bookings and our forecast for a soft first quarter, um, into into next year.

Ryan Boyer Koontz: Got it. Specifically there then within your reported fourth quarter, community broadband looked a little soft. That's what you're pointing to there in the?

Ryan Koontz: Got it. Specifically there then within your reported fourth quarter, community broadband looked a little soft. That's what you're pointing to there in the?

Um, but, uh, I don't want to expect it to affect the total year. So, in the second quarter, we should be normalized.

Cheryl P. Beranek: Yeah. Right. The community broadband was soft. I mean, in fourth quarter, it's actually kind of flat over last year, which is really unusual, even down a little bit over last year. Community broadband was partly the government shutdown, but I would say more affected over the course of the year by the delay in BEAD. Certainly, the smaller the service provider, the more the delay in BEAD has affected both their deployments and their planning, their engineering dollars, their engineering availability, and then financing, setting aside money to deal with BEAD. We even saw it in private investment as well, kind of in that smaller space, because community broadband is more than just the Tier 3 operator. It's some of the private equity money that is being used at the smaller level.

Cheri Beranek: Yeah. Right. The community broadband was soft. I mean, in fourth quarter, it's actually kind of flat over last year, which is really unusual, even down a little bit over last year. Community broadband was partly the government shutdown, but I would say more affected over the course of the year by the delay in BEAD. Certainly, the smaller the service provider, the more the delay in BEAD has affected both their deployments and their planning, their engineering dollars, their engineering availability, and then financing, setting aside money to deal with BEAD. We even saw it in private investment as well, kind of in that smaller space, because community broadband is more than just the Tier 3 operator. It's some of the private equity money that is being used at the smaller level.

Cheryl P. Beranek: We just saw money being set, kind of sitting on the sidelines waiting for BEAD to figure out where it's going to be deployed, because we don't sometimes think about that. Where the BEAD dollars go affects where the private investment, the timing of private investment, because you want to leverage the money that or the fiber that's going into a BEAD network can be leveraged for a middle mile and other work elsewhere. It does have a follow-on or a kind of a waterfall effect. We're anxious to get the BEAD awards out. While it won't, the 26, I think we're going to see 26 have BEAD dollars, but the biggest impact of it is going to be private money coming back because BEAD is now actually finally figured out.

We just saw money being set, kind of sitting on the sidelines waiting for BEAD to figure out where it's going to be deployed, because we don't sometimes think about that. Where the BEAD dollars go affects where the private investment, the timing of private investment, because you want to leverage the money that or the fiber that's going into a BEAD network can be leveraged for a middle mile and other work elsewhere. It does have a follow-on or a kind of a waterfall effect. We're anxious to get the BEAD awards out. While it won't, the 26, I think we're going to see 26 have BEAD dollars, but the biggest impact of it is going to be private money coming back because BEAD is now actually finally figured out.

A delay in bead has affected, um, both their, their deployments and their planning, um, you know, their engineering dollars and their engineering availability. And then, you know, financing setting aside, um, money to to deal with bead and we even saw it in in private investment as well. Um, kind of in that smaller space, um, because, you know, Community Broadband is more than just the tier 3 operator. It's, you know, some of the, uh, private Equity money that is, you know, being used at the smaller level. Um, and we just saw money being set, you know, kind of sitting on the sidelines waiting for B to to figure out where it's going to be deployed um because you know you we don't sometimes think about that. Where are the bead dollars go effects where the private investment the timing of private investment because you want to leverage the um, the money that or the the fiber that's going into a bead Network can be leveraged for, you know, a middle Mile and other, um, work elsewhere.

Ryan Boyer Koontz: Got it. Helpful. Dan, on the gross margin outlook there relative to where you are in continuing operations, how do you think about broadly margins going forward? Is it purely a matter of scale at this point? You expect some modest improvements in gross margin going forward with higher revenues?

Ryan Koontz: Got it. Helpful. Dan, on the gross margin outlook there relative to where you are in continuing operations, how do you think about broadly margins going forward? Is it purely a matter of scale at this point? You expect some modest improvements in gross margin going forward with higher revenues?

So it does have a a follow on or a kind of a waterfall effect um so we're anxious to get the bead Awards out um and while it won't the 26th uh yeah I think we're going to see 26 have B dollars but the biggest impact um of it is going to be private money. Coming back because bead is now actually finally figured out.

Timothy Paul Savageaux: Yep, that's exactly how to read that, Ryan. Obviously, volume dependent. First quarter would be looking a little bit lighter, but scaling with revenue increases from there.

Dan Herzog: Yep, that's exactly how to read that, Ryan. Obviously, volume dependent. First quarter would be looking a little bit lighter, but scaling with revenue increases from there.

It helpful and Dan on the on, the gross margin Outlook, their relative to where you are and continuing operations. Um how do you think about broadly margins? Going forward is it is it purely a matter of of scale at this point? And you expect some modest improvements in in gross margin going forward with with higher revenues.

Yep. That's exactly how to read that. Ryan, um, obviously, volume dependent. So, first quarter, um, would be looking a little bit.

Lighter. Um, but, um, and um,

Ryan Boyer Koontz: Got it. Sherry, any thoughts about industry fiber supply right now? Is that coming up much of a concern? Have you heard that from your customers at all in terms of raw fiber?

Ryan Koontz: Got it. Cheri, any thoughts about industry fiber supply right now? Is that coming up much of a concern? Have you heard that from your customers at all in terms of raw fiber?

Scaling, uh, with the revenue increases from there. Mhm, got it. And Sherry, any thoughts about, um,

Cheryl P. Beranek: Unfortunately, over and over, and in every customer, regardless of size, the data center utilization of fiber is affecting Corning's allocation, and then it affects Corning's allocation to other service providers, which in turn will affect broadband deployments. We're aggressively helping both for our own sake, as well as for our customer's sake, sourcing and identifying equivalent fibers that can be approved in those networks.

Cheri Beranek: Unfortunately, over and over, and in every customer, regardless of size, the data center utilization of fiber is affecting Corning's allocation, and then it affects Corning's allocation to other service providers, which in turn will affect broadband deployments. We're aggressively helping both for our own sake, as well as for our customer's sake, sourcing and identifying equivalent fibers that can be approved in those networks.

Uh, industry fiber Supply right now is that coming up much at of a concern? Um have you heard that from your customers at all in terms of uh raw fiber? Unfortunately unfortunately over and over um and and then and then every customer regardless of size

Um, so the, um, the the data center glut of utilization of fiber is, is affecting corning's allocation. Um, and then it affects according to allocation to other service providers, which in turn, um, you know, will affect, you know, Broadband deployments. So we're um, uh aggressively help both for our own sake, as well as, for our customers sake, um, sourcing. Um, all and identifying equivalent Tech.

Ryan Boyer Koontz: Got it. Really helpful. That's all I've got for now. Thank you.

Ryan Koontz: Got it. Really helpful. That's all I've got for now. Thank you.

Equivalent fibers that can be approved. Um, in those Networks.

Cheryl P. Beranek: Yeah.

Cheri Beranek: Yeah.

Operator: The next question comes from Scott Serley with Ross Capital. Please go ahead.

Operator: The next question comes from Scott Searle with Roth Capital. Please go ahead.

Scott Wallace Searle: Hey, good morning. Thanks for taking the questions. Maybe just a couple of quick calibration questions. Dan, I'm just wondering what Nestor was in the September quarter just to kind of look at our published numbers apples to apples. Looking into the December quarter, could you give us a little bit of color in terms of the sequential outlook by the different customer classifications? It sounds like community broadband will be under a little bit of pressure given BEAD and government shutdowns, but I'd love to have a little bit of color on that front. What you need in terms of turns to get to the lower end of the range and what the visibility is in the immediate outlook? I had a follow-up.

Scott Searle: Hey, good morning. Thanks for taking the questions. Maybe just a couple of quick calibration questions. Dan, I'm just wondering what Nestor was in the September quarter just to kind of look at our published numbers apples to apples. Looking into the December quarter, could you give us a little bit of color in terms of the sequential outlook by the different customer classifications? It sounds like community broadband will be under a little bit of pressure given BEAD and government shutdowns, but I'd love to have a little bit of color on that front. What you need in terms of turns to get to the lower end of the range and what the visibility is in the immediate outlook? I had a follow-up.

The next question comes from Scott Shirley with Los Capital. Please go ahead.

Hey, good morning. Thanks for taking the questions. Hey, maybe just a couple of quick calibration questions, Dan. I'm just wondering what Nestor was in the September quarter, just to kind of look at our published numbers, apples to apples. And then looking into the December quarter, could you give us a little bit of color in terms of?

Timothy Paul Savageaux: Yeah. I'll take the first one there. Nestor finished their fourth quarter with $9.4 million in revenue, with Clearfield being $41 million. That would have put us at $50.4 million exactly.

Dan Herzog: Yeah. I'll take the first one there. Nestor finished their fourth quarter with $9.4 million in revenue, with Clearfield being $41 million. That would have put us at $50.4 million exactly.

The sequential Outlook by the different customer classifications. It sounds like Community Broadband will be under a little bit of pressure uh, given uh, bead and government shutdowns. But I'd love to have a little bit of color on that front and what you need in terms of terms, you know, to get to the lower end of the range and what the visibility is. And, and the immediate Outlook, and then I had a follow-up.

Yeah, I'll take the first one there. Nestor finished, you know, their fourth quarter was $9.4 million in revenue.

Um, so with the Clearfield field being $411.

So, that would have put us at, uh, uh, 50.4, rough, uh, exactly.

Scott Wallace Searle: Helpful. In terms of the December outlook?

Scott Searle: Helpful. In terms of the December outlook?

Cheryl P. Beranek: Yeah. Community broadband is definitely a bit pressured, as I indicated, both from BEAD, the government shutdown, and the private money that goes around it. We continue to be extremely pleased with our work in the large regional group, as well as in the regional MSO markets. They now comprise about close to 40% of our business. That really is a means of leveraging our existing sales channel, in that the large regional and the regional cable operator typically will have deployments in the same neighborhoods as the community broadband team. Our work, our reputation, and our sales channel, excuse me, in community broadband is what we're able to leverage for that MSO and large regional markets. Anyone with our larger customers than the community broadband team is, and it means we get some larger orders and some opportunity to scale with it.

Cheri Beranek: Yeah. Community broadband is definitely a bit pressured, as I indicated, both from BEAD, the government shutdown, and the private money that goes around it. We continue to be extremely pleased with our work in the large regional group, as well as in the regional MSO markets. They now comprise about close to 40% of our business. That really is a means of leveraging our existing sales channel, in that the large regional and the regional cable operator typically will have deployments in the same neighborhoods as the community broadband team. Our work, our reputation, and our sales channel, excuse me, in community broadband is what we're able to leverage for that MSO and large regional markets. Anyone with our larger customers than the community broadband team is, and it means we get some larger orders and some opportunity to scale with it.

Helpful and then and then in terms of the uh the December Outlook.

Cheryl P. Beranek: With community broadband coming back, in fact, let me look here for a second. I mean, the MSOs were up for the year close to 40%. Large regionals for the year were up close to 60%. With that momentum and with community broadband, hopefully, we anticipate coming back in the second quarter, we could have a really strong build season for next year. I just wanted to go back a little bit to the lack of fiber question that Ryan brought up earlier. That's one of the reasons that if people look at our long-term or annual forecast, our annual forecast is guided by what we can see. That's part of our reputation as a company, to be, I wouldn't say conservative, but I would say deliberate about our forecast.

With community broadband coming back, in fact, let me look here for a second. I mean, the MSOs were up for the year close to 40%. Large regionals for the year were up close to 60%. With that momentum and with community broadband, hopefully, we anticipate coming back in the second quarter, we could have a really strong build season for next year. I just wanted to go back a little bit to the lack of fiber question that Ryan brought up earlier. That's one of the reasons that if people look at our long-term or annual forecast, our annual forecast is guided by what we can see. That's part of our reputation as a company, to be, I wouldn't say conservative, but I would say deliberate about our forecast.

Reputation and our sales Channel. Excuse me in community Broadband, is what we're able to leverage for that MSO and large Regional markets. Um, anyone that was our larger customers, um, uh, than the than the community Broadband team uh, is. And uh, it means the, you know, we get some larger orders and some opportunity to scale with it. So, um, with with Community Broad and coming back. Um, in fact, let me look here for a second, I'm in community. Uh,

Cheryl P. Beranek: With the lack of fiber being outside of our control, that could be one of the contributing factors of our long-term numbers.

With the lack of fiber being outside of our control, that could be one of the contributing factors of our long-term numbers.

Scott Wallace Searle: Great. Thank you. Sherry, if I could, just to follow up in terms of the annual outlook, starting the year slow, but it sounds like you start to see normalization in the second quarter. The math on the $160 to 170 million range implies kind of mid-40s through the rest of the year. I assume that's kind of ramping. I'm wondering what you're factoring into that forecast. Is it just normalization of the existing customer base and spending patterns? How much are you factoring in for BEAD? You've got some new products that seem like they're kind of intriguing in terms of your next-gen splicing and data center. I'm wondering how they fit into the equation as well.

Scott Searle: Great. Thank you. Cheri, if I could, just to follow up in terms of the annual outlook, starting the year slow, but it sounds like you start to see normalization in the second quarter. The math on the $160 to 170 million range implies kind of mid-40s through the rest of the year. I assume that's kind of ramping. I'm wondering what you're factoring into that forecast. Is it just normalization of the existing customer base and spending patterns? How much are you factoring in for BEAD? You've got some new products that seem like they're kind of intriguing in terms of your next-gen splicing and data center. I'm wondering how they fit into the equation as well.

the it was mso's were up for the year close to 40% large regionals, for the year were up close to 60%. So, with that momentum and with Community Broadband hopefully, uh, we anticipate coming back in second quarter. Um, we could have, you know, a really strong, uh, Bill season for next year. I just want to go back a little bit to the lack of fiber question, um, that Ryan brought up earlier. And that's 1 of the reasons that, um, we're if, if people look at our long-term, you know, our annual forecasts, our annual forecasts is Guided by what we can see, that's part of our our reputation. Um, as a company is to be, um, I wouldn't say conservative, but I would say deliberate about our um, uh, our forecasts and with the lack of fiber being outside of our control that could be 1 of the contributing factors um, of our long-term members.

Cheryl P. Beranek: Right. We are not identifying a significant amount of revenue for new product introductions, only a few million dollars, because typically you need a full, especially for outside plant products, you need a full year for them to go through an outside weather cycle before you have a long-term commitment for high-end revenue. We see the new product introductions for the splice case, and really excited about the next-gen cassette line as being more significant revenue in 2027.

Cheri Beranek: Right. We are not identifying a significant amount of revenue for new product introductions, only a few million dollars, because typically you need a full, especially for outside plant products, you need a full year for them to go through an outside weather cycle before you have a long-term commitment for high-end revenue. We see the new product introductions for the splice case, and really excited about the next-gen cassette line as being more significant revenue in 2027.

Great, thank you and and share. If I could just to follow up in terms of the annual Outlook um starting the year slow, but it sounds like you start to see normalization in the second quarter. You know, the math on the 160 to 170 range implies kind of mid 40s through the rest of the year. So I assume that's kind of ramping, um, but I'm wondering what your factoring into that forecast. Is it just normalization, um, of the existing customer base and spending patterns, how much are you factoring in for bead? And then you've got some new products that seem like they're kind of interesting in terms of your nextg, splicing and data center. I'm wondering how they fit into the equation as well.

All right.

The uh, uh, we are, uh, not identifying a significant amount um, of revenue for new product. Introductions it's only a few million dollars, um, because typically, you know, you need a full, uh, access especially for outside plant products. You need a full year, um, for them to go through and outside weather cycle before, you know, you have a long term commitment from, um, for, you know, High high-end, um, Revenue. Um, we see high that the new product introductions for the Spice case and really excited about the NextGen, um, cassette line, um, as being more significant Revenue in 27,

Scott Wallace Searle: Very good. Just in terms of how you're thinking about BEAD and that number in that $160 to 170 million?

Scott Searle: Very good. Just in terms of how you're thinking about BEAD and that number in that $160 to 170 million?

Cheryl P. Beranek: Yeah. I would say we're looking at probably less than $10 million in that. That's going to be, remember, they got to build first with kind of middle-mile stuff, and the actual construction of placing cabinets is probably going to be in our fourth quarter. One of the things that we have to remember for our numbers is that since our numbers end in September of next year, we tend to miss some of the fall numbers in the build season. Next year's fourth quarter and first quarter will be significantly stronger than what we're seeing here.

Cheri Beranek: Yeah. I would say we're looking at probably less than $10 million in that. That's going to be, remember, they got to build first with kind of middle-mile stuff, and the actual construction of placing cabinets is probably going to be in our fourth quarter. One of the things that we have to remember for our numbers is that since our numbers end in September of next year, we tend to miss some of the fall numbers in the build season. Next year's fourth quarter and first quarter will be significantly stronger than what we're seeing here.

Scott Wallace Searle: Great, if I could, new products, what does that do to your addressable market? Cassettes, I'm sure it's just extending your existing position, but what does the data center do when things go back in season?

Scott Searle: Great, if I could, new products, what does that do to your addressable market? Cassettes, I'm sure it's just extending your existing position, but what does the data center do when things go back in season?

A very good and just in terms of how you're thinking about being, um, in that numbers and that 160 to 1 170 million, okay? Yeah, I would say the more looking at, you know, probably less than 10 million dollars. Um, in that that's going to be remember they got to build first with passing Hall um, with kind of middle mile stuff and and the actual construction of placing cabinets is probably going to be in um, our fourth quarter and that's 1 of the things that we have to remember. For our numbers is that, since our numbers end in September of next year, we tend to miss some of the Fall numbers, um, in the bill season, so, um, especially with we. So next year's fourth quarter and first quarter will be um, significantly stronger than what we're seeing here.

Cheryl P. Beranek: Actually, the next-generation cassette line is all about new customers as well as being, eventually, there'll be a transformational back to our existing customers. As we talked about, the next center to go after, the non-hyperscale data center, is a—I use the word disciplined approach because we could go after hyperscalers and we would lose because that's a high-volume, low-mix solution. That's not the way Clearfield is designed. It's not the way our manufacturing lines are set up. We compete aggressively in a low-volume, high-mix world. Data centers at the edge that push to the edge, where we're going to see our customers and smaller data centers picking up the compute power requirements from the big guys as they move out, that's where we're really going to have a significant opportunity because it's our space. It's a space in which that high-volume manufacturer doesn't work.

Cheri Beranek: Actually, the next-generation cassette line is all about new customers as well as being, eventually, there'll be a transformational back to our existing customers. As we talked about, the next center to go after, the non-hyperscale data center, is a—I use the word disciplined approach because we could go after hyperscalers and we would lose because that's a high-volume, low-mix solution. That's not the way Clearfield is designed. It's not the way our manufacturing lines are set up. We compete aggressively in a low-volume, high-mix world. Data centers at the edge that push to the edge, where we're going to see our customers and smaller data centers picking up the compute power requirements from the big guys as they move out, that's where we're really going to have a significant opportunity because it's our space. It's a space in which that high-volume manufacturer doesn't work.

Great. And unless if I could um, you know, new products, what does that do to your adjustable Market? Um, you know, cassettes, uh, I'm sure it was just extending your existing position. But what is what is the data center doing? Oh actually, then then, then, the next Generation cassette line is all about new customers, um, as well as being, um, eventually, they'll be, um, transformational back to our existing customers. So, the, um, as we talked about the next Center to go after the non-, hyperscale data center is a, I use the word disciplined approach, um, because we could go after hyperscalers and we would lose because, you know, that's a high volume low, mix Solution. That's not the way Clearfield is designed. Um, it's not the way our manufacturer.

Cheryl P. Beranek: You've got to be able to do a lot more push and pull. The new data center—excuse me—the new data center cassette is going to allow a lot of unique configurations inside of a particular 19-inch panel, so that you can design by cassette. You can expect to see that launched around Bixby in January, and it'll be fully undebuted and on display in that January show.

You've got to be able to do a lot more push and pull. The new data center—excuse me—the new data center cassette is going to allow a lot of unique configurations inside of a particular 19-inch panel, so that you can design by cassette. You can expect to see that launched around Bixby in January, and it'll be fully undebuted and on display in that January show.

That. Um, so you can expect to see that launched um around Dixie in January, um and it'll be fully on day uh, debuted and on display and January show.

Scott Wallace Searle: Great. Thanks so much. I'll get back in the queue.

Scott Searle: Great. Thanks so much. I'll get back in the queue.

Great. Thanks so much. I'll get back in the queue.

Operator: As a reminder, if you would like to ask a question, please press star, then one to join the question queue. The next question comes from Tim Savile with Northland Capital Markets. Please go ahead.

Operator: As a reminder, if you would like to ask a question, please press star, then one to join the question queue. The next question comes from Tim Savageaux with Northland Capital Markets. Please go ahead.

As a reminder.

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