Q4 2026 Vecima Networks Inc Earnings Call

September 24, 2026

Speaker #1: Hello, this is the Chorus Call conference operator. Welcome to Vecima Networks' Q4 and QY fiscal 2026 results conference call and webcast. As a reminder, all participants are in a listen-only mode, and the conference is being recorded.

Operator: Hello, this is the Chorus Call conference operator. Welcome to Vecima Networks' Q4 and full year fiscal 2026 results conference call and webcast. As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. Analysts and institutional investors who wish to join the question queue simply press star and 1 on your touchtone phone. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up the handset before pressing any keys. Should you need assistance during the conference call, you may signal the operator by pressing star and 0. Presenting today on behalf of Vecima Networks are Sumit Kumar, President and CEO, and Judd Schmid, Chief Financial Officer.

Operator: Hello, this is the Chorus Call conference operator. Welcome to Vecima Networks' Q4 and full year fiscal 2026 results conference call and webcast. As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. Analysts and institutional investors who wish to join the question queue simply press star and one on your touchtone phone. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up the handset before pressing any keys.

Speaker #1: After the presentation, there will be an opportunity to ask questions. Analysts and institutional investors who wish to join the question queue simply press star and one on your touch-tone phone.

Speaker #1: You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up the handset before pressing any keys. Should you need assistance during the conference call, you may signal the operator by pressing star and zero.

Operator: Should you need assistance during the conference call, you may signal the operator by pressing star and 0. Presenting today on behalf of Vecima Networks are Sumit Kumar, President and CEO, and Judd Schmid, Chief Financial Officer.

Speaker #1: Presenting today on behalf of Vecima Networks are Sumit Kumar, President and CEO, and Judd Schmid, Chief Financial Officer. Today's call will begin with executive commentary on Vecima's financial and operational performance for the fourth quarter and full year fiscal 2026 results. Lastly, the call will finish with a question-and-answer session for analysts and institutional investors.

Operator: Today's call will begin with executive commentary on Vecima's financial and operational performance for the Q4 and full year fiscal 2026 results. Lastly, the call will finish with a question and answer session period for analysts and institutional investors. The press release announcing the company's Q4 and full year fiscal 2026 results, as well as detailed supplemental investor information, are posted on Vecima's website at www.vecima.com under the investor relations heading. The highlights provided in this call should be understood in conjunction with the company's audited annual consolidated financial statements and accompanying notes for years ended 30 June 2026 and 2025. Certain statements in this conference call and webcast may constitute forward-looking statements within the meaning of applicable securities laws from which Vecima's actual results could differ. Consequently, attendees should not place undue reliance on such forward-looking statements.

Speaker #1: The press release announcing the company's fourth quarter and full-year fiscal 2026 results, as well as detailed supplemental investor information, is posted on Vecima's website at www.vecima.com under the Investor Relations heading.

Speaker #1: The highlights provided in this call should be understood in conjunction with the company's audited annual consolidated financial statements and accompanying notes for the years ended June 30, 2026, and 2025.

Operator: The highlights provided in this call should be understood in conjunction with the company's audited annual consolidated financial statements and accompanying notes for years ended 30 June 2026 and 2025. Certain statements in this conference call and webcast may constitute forward-looking statements within the meaning of applicable securities laws from which Vecima's actual results could differ. Consequently, attendees should not place undue reliance on such forward-looking statements.

Speaker #1: Certain statements in this conference call and webcast may constitute forward-looking statements within the meaning of applicable securities laws, and Vecima's actual results could differ.

Speaker #1: Consequently, attendees should not place undue reliance on such forward-looking statements. All statements, other than statements of historical fact, are forward-looking statements. These statements include, but are not limited to, statements regarding management's intentions, beliefs, or current expectations with respect to market and general economic conditions, future sales and revenue expectations, future costs, and operating performance.

Operator: All statements other than statements of historical fact are forward-looking statements. These statements include, but are not limited to, statements regarding management's intentions, beliefs, or current expectations with respect to market and general economic conditions, future sales and revenue expectations, future costs, and operating performance. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict and/or are beyond our control. Vecima disclaims any intention or obligation to update or revise any forward-looking statements as a result of new information, future events, or otherwise, except as required by law. Please review the cautionary language in the company's Q4 and full year fiscal 2026 earnings report and press release, as well as its annual information form dated 24 September 2026, regarding the various factors, assumptions, and risks that could cause actual results to differ.

Speaker #1: These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict and/or are beyond our control. Vecima disclaims any intention or obligation to update or revise any forward-looking statements.

Operator: Vecima disclaims any intention or obligation to update or revise any forward-looking statements as a result of new information, future events, or otherwise, except as required by law. Please review the cautionary language in the company's Q4 and full year fiscal 2026 earnings report and press release, as well as its annual information form dated 24 September 2026, regarding the various factors, assumptions, and risks that could cause actual results to differ.

Speaker #1: As a result of new information, future events, or otherwise, except as required by law. Please review the cautionary language in the company's fourth quarter and full year fiscal 2026 earnings report and press release, as well as its annual information form dated September 24, 2026, regarding the various factors, assumptions, and risks that could cause actual results to differ.

Speaker #1: These documents are available on Vecima's website at www.vecima.com under the Investor Relations heading, and on Cedar at www.cedarplus.ca. At this time, I would like to turn the conference over to Mr. Kumar to proceed with his remarks.

Operator: These documents are available on Vecima's website at www.vecima.com under the investor relations heading and on SEDAR at www.sedarplus.ca. At this time, I would like to turn the conference over to Mr. Kumar to proceed with his remarks. Please go ahead.

Speaker #1: Please go ahead.

Speaker #2: Good morning, and welcome, everyone. Thank you for joining us. We closed out Vecima's fiscal 2026 year with a breakthrough fourth quarter that included our best-ever quarterly financial results, and another increase to our outlook.

Sumit Kumar: Good morning and welcome, everyone. Thank you for joining us. We closed out Vecima's fiscal 2026 year with a breakthrough Q4 that included our best-ever quarterly financial results and another increase to our outlook. I will start today with an overview of our Q4 highlights and of course, some of the high-level achievements all through the past year. Judd will provide our Q4 financial review, and then I will return to discuss the significant growth we see out ahead before opening the call to your questions. As a result of the divestiture of the telematics business in July, our remarks today are going to focus on the remaining continuing operations of our VBS and CDS segments only. Q4 was the strongest in Vecima's history.

Speaker #2: I'll start today with an overview of our Q4 highlights and, of course, some of the high-level achievements throughout the past year. Judd will provide our fourth-quarter financial review, and then I'll return to discuss the significant growth we see ahead.

Speaker #2: Before opening the call to your questions, as a result of the divestiture of the telematics business in July, our remarks today are going to focus on the remaining continuing operations of our VBS and CDS segments only.

Sumit Kumar: As a result of the divestiture of the telematics business in July, our remarks today are going to focus on the remaining continuing operations of our VBS and CDS segments only. Q4 was the strongest in Vecima's history.

Speaker #2: The fourth quarter was the strongest in Vecima's history. As wide-scale DAA rollouts gained momentum, our Q4 consolidated revenues climbed 36% year over year to a record $91 million, and 45% sequentially, quarter over quarter.

Sumit Kumar: As widescale DAA rollouts gained momentum, our Q4 consolidated revenues climbed 36% year over year to a record CAD 91 million and 45% sequentially quarter over quarter. Q4 adjusted EBITDA more than tripled year on year to an all-time high of CAD 18.9 million, achieving adjusted EBITDA margins of 20.8% in the quarter. These were deeply satisfying results, but I want to emphasize that they reflect just the early returns on Vecima's long-term strategy. As you know, broadband operators worldwide have been preparing for a once-in-a-generation technology transition to distributed access architecture and DOCSIS 4.0 for many years now they have been preparing. Vecima has played a key role in this evolution, leveraging our deep experience and technical strengths and partnering closely with customers to provide them the innovative, interoperable technologies that underpin these network transformations.

Speaker #2: Q4 adjusted EBITDA more than tripled year over year to an all-time high of $18.9 million, achieving adjusted EBITDA margins of 20.8% in the quarter.

Speaker #2: These were deeply satisfying results. But I want to emphasize that they reflect just the early returns on Vecima's long-term strategy. As you know, broadband operators worldwide have been preparing for a once-in-a-generation technology transition to distributed access architecture and DOCSIS 4.0 for many years now they've been preparing.

Speaker #2: Vecima has played a key role in this evolution, leveraging our deep experience and technical strengths, and partnering closely with customers to provide them with the innovative, interoperable technologies that underpin these network transformations.

Speaker #2: It's taken sharp focus, significant investment, and an unwavering strategy to build the industry's most comprehensive portfolio of DAA, cable broadband, and fiber-to-the-home broadband access platforms.

Sumit Kumar: It has taken sharp focus, significant investment, and an unwavering strategy to build the industry's most comprehensive portfolio of DAA cable broadband and fiber to the home broadband access platforms. Today, we have emerged as a leading global force in the next generation broadband access as wide-scale rollouts of these network upgrades, those wide-scale rollouts translate into ramp in demand for our solutions. That is part of a wave that is really just starting to build. In our Video and Broadband Solutions segment, Q4 revenue climbed to a record CAD 80.1 million, up 38% year-over-year, as demand and sales for our next gen Entra DAA products accelerated. This was driven in part by a significant ramp-up of deliveries to Charter Communications, as we support the expansion of their DAA rollout under our multi-year cable and fiber agreement with this leading tier 1 operator customer.

Speaker #2: And today, we've emerged as a leading global force in next-generation broadband access. As wide-scale rollouts of these network upgrades continue, those wide-scale rollouts translate into ramped-up demand for our solutions.

Speaker #2: And that's part of a wave that is really just starting to build. In our Video and Broadband Solutions segment, fourth quarter revenue climbed to a record $80.1 million, up 38% year-over-year, as demand and sales for our next-gen DAA products accelerated.

Speaker #2: This was driven, in part, by a significant ramp-up of deliveries to targeted communications, as we supported the expansion of their DAA rollout under our multi-year cable and fiber agreement with this leading tier-one operator customer.

Speaker #2: It also reflects our growing relationships with a large and ever-expanding base of operators worldwide. By year-end, we had broadband engagements with 150 customers—an increase of more than 100 customers over just a few short years.

Sumit Kumar: It also reflects our growing relationships with a large and ever-expanding base of operators worldwide. By year-end, we had broadband engagements with 150 customers, an increase of more than 100 customers over just a few short years. The expansion and deepening of our customer base also contributed to very strong sales for our Entra optical products, led by our SF-4X optical line terminals for fiber to the home. Vecima was already the number one global market leader for remote OLT terminals, so this further builds on our position, and it underscores Vecima's increasingly important role as a critical supplier in the fiber to the home space, supported by our 10 gig-plus fiber broadband capabilities. Shipments of our new ERM3 Remote PHY modules also rose sharply in the quarter as we supported our customers' ongoing network upgrades. Demand continued to grow for our highly successful EN9000 GAP nodes.

Speaker #2: The expansion and deepening of our customer base also contributed to very strong sales for our entire optical products, led by our SF4X optical line terminals for fiber to the home.

Speaker #2: Vecima was already the number one global market leader for remote OLT terminals, so this further builds on our position. It underscores Vecima's increasingly important role as a critical supplier in the fiber-to-the-home space, supported by our 10 Gig-plus fiber broadband capabilities.

Speaker #2: Shipments of our new ERM3 Remote 5 modules also rose sharply in the quarter, as we supported our customers' ongoing network upgrades. Demand continued to grow for our highly successful EN9000 Gap Nodes.

Speaker #2: As we've discussed previously, the EN9000 provides operators with a flexible foundation that supports evolving DOCSIS and fiber-to-the-home technologies, while reducing the need for future hardware replacements.

Sumit Kumar: As we have discussed previously, the EN9000 provides operators with a flexible foundation that supports evolving DOCSIS and fiber to the home technologies while reducing the need for future hardware replacements. So this underscores a significant network incumbency advantage that our very broad footprint of deployed access platforms has now established. Combined, Entra platforms are now providing multi-gigabit broadband connections to tens of millions of homes, and we expect this increasingly deep footprint to evolve through multiple generations of further broadband investment, allowing Vecima to monetize our widely deployed base of Entra platforms for years to come. Keep in mind that while achieving all-time record results from our existing Entra portfolio in Q4, we are also advancing new technologies that we expect will become a major new series of growth engines for Vecima.

Speaker #2: So this underscores the significant network incumbency advantage that our very broad footprint of deployed access platforms is now established. Combined, enter platforms are now providing multi-gigabit broadband connections to tens of millions of homes.

Speaker #2: And we expect this increasingly deep footprint to evolve through multiple generations of further broadband investment, allowing Vecima to monetize our widely deployed base of ENTER platforms for years to come.

Speaker #2: Keep in mind that while achieving all-time record results from our existing entire portfolio in Q4, we're also advancing new technologies that we expect will become major new growth engines for Vecima.

Speaker #2: We made significant progress with our VCMTS solution in Q4, progressing trials with our lead tier-one customer, while also signing new agreements with additional major customers, including Videotron, a large tier-one operator in Canada.

Sumit Kumar: We made significant progress with our vCMTS solution in Q4, progressing trials with our lead tier 1 customer, while also signing new agreements with additional major customers, including Videotron, a large tier 1 operator in Canada. We now count seven vCMTS wins, including two tier 1s so far, with many new customers engaged, including several more tier 1s, 2s, and 3s. In our commercial video portfolio, our next gen Terrace IQ solution has also been gaining broad traction. Subsequent to year-end, a major North American tier 1 operator selected Terrace IQ for a broad commercial video network modernization spanning thousands of locations and properties. In just the last year, we secured multiple new design wins for Terrace IQ and other customers as well, including three tier 1s and an additional tier 2.

Speaker #2: We now count seven VCMTS wins, including two tier-ones so far, with many new customers engaged, including several more tier-ones, twos, and threes. In our commercial video portfolio, our next-gen Terraside Q solution has also been gaining broad traction.

Speaker #2: Subsequent to year-end, a major North American tier-one operator selected Terraside Q for a broad commercial video network modernization, spanning thousands of locations and properties.

Speaker #2: In just the last year, we secured multiple new design wins for Terraside Q and other customers as well, including three tier-ones and an additional tier-two.

Speaker #2: But taken together, these achievements are setting the stage for sustained growth in the VBS segment, both in the near and the long term, and we've fully expect to build further on the all-time highs we just produced.

Sumit Kumar: Taken together, these achievements are setting the stage for sustained growth in the VBS segment, both in the near and the long term, and we fully expect to build further on the all-time highs we just produced. I will talk more about that a little later in the call. Turning to Content Delivery and Storage, the segment generated double-digit Q4 revenue growth, both year-over-year and quarter-over-quarter, as uptake of managed IPTV installations expanded. We also made excellent progress with our targeted dynamic ad insertion solution as we continue to deploy phase II with our lead customer, Hotwire Communications. DAI enables operators to deliver targeted, personalized advertising experiences, increasing video ARPU without having to increase the rates to customers. Overall, it was an outstanding quarter for Vecima, and one that marked a major milestone as we now embark on a significant new phase of growth.

Speaker #2: I'll talk more about that a little later in the call. Turning to content delivery and storage, the segment generated double-digit Q4 revenue growth, both year-over-year and quarter-over-quarter, as uptake of managed IPTV installations expanded.

Speaker #2: We also made excellent progress with our targeted dynamic ad insertion solution, as we continue to deploy phase two with our lead customer, Hotwire Communications.

Speaker #2: DAI enables operators to deliver targeted, personalized advertising experiences, increasing video RPUs without having to increase the rates to customers. Overall, it was an outstanding quarter for Vecima—one that marked a major milestone as we now embark on a significant new phase of growth.

Speaker #2: To ensure that we're positioned to take advantage of the exciting opportunities ahead, we've also undertaken some important strategic initiatives in recent months. In July, we divested our telematics business, enabling us to sharpen our focus on the fast-growing broadband access and streaming video businesses.

Sumit Kumar: To ensure that we are positioned to take advantage of the exciting opportunities ahead, we have also undertaken some important strategic initiatives in recent months. In July, we divested our telematics business, enabling us to sharpen our focus on the fast-growing broadband access and streaming video businesses, while also boosting our balance sheet. In August, we announced two executive leadership appointments that will help support us on our path forward. While I will remain, of course, the CEO of Vecima, we have elevated Clay McCreery to President and Chief Operating Officer, focused on Vecima's strategic performance and long-term growth. Ryan Nicometo, who previously led our VBS segment as GM, has been promoted to the newly created Chief Product Officer role, where he is focused on executing a unified product strategy all across our platforms.

Speaker #2: While also boosting our balance sheet. And in August, we announced two executive leadership appointments that will help support us on our path forward. While I'll remain CEO of Vecima, we've elevated Clay Recury to President and Chief Operating Officer, focused on Vecima's strategic performance and long-term growth.

Speaker #2: And Ryan Nicometto who previously led our VBS segment as GM has been promoted to the newly created chief product officer role, where he's focused on executing the unified product strategy all across our platforms.

Speaker #2: So these appointments not only strengthen our leadership structure, they also recognize the important contributions Clay and Ryan have made to Vecima for many years now.

Sumit Kumar: These appointments not only strengthen our leadership structure, they also recognize the important contributions Clay and Ryan have made to Vecima for many years now. Now I will turn the call over to Judd to discuss our Q4 results financials in more detail. Judd?

Speaker #2: Now I'll turn the call over to Judd to discuss our fourth quarter results and financials in more detail. Judd.

Speaker #3: Thanks, Simit. Good morning, everyone. I'll walk through our fourth quarter financial performance in more detail. For the purposes of this call, I'll assume that everyone has seen our Q4 Fiscal 2026 news release, MD&A, and financial statements posted on Vecima's website.

Judd Schmid: Thanks, Sumit. Good morning, everyone. I will walk through our Q4 financial performance in more detail. For the purposes of this call, I will assume that everyone has seen our Q4 fiscal 2026 news release, MD&A, and financial statements posted on Vecima's website. Please refer to today's news release and our MD&A for definitions and reconciliations of the non-IFRS financial measures I will be referencing. As we have said over the past few months, we expected the Q4 of fiscal 2026 to mark the start of an accelerated growth period for Vecima, and that is exactly what played out. This quarter's results came in as we anticipated. As Sumit noted, the results I will be discussing today reflect the continuing operations of our VBS and CDS segments. Results from our telematics segment, which we sold in July 2026, are reported as discontinued operations and are not part of my commentary today.

Speaker #3: Please refer to today's news release and our MD&A for definitions and reconciliations of the non-IFRS financial measures I'll be referencing. As we've said over the past few months, we expected the fourth quarter fiscal 26 to mark the start of an accelerated growth period for Vecima, and that's exactly what played out.

Speaker #3: This quarter's results came in as we anticipated. And as Simit noted, the results I'll be discussing today reflect the continuing operations of our VBS and CDS segments. Results from our telematics segment, which we sold in July 2026, are reported as discontinued operations and are not part of my commentary today.

Speaker #3: Starting with consolidated sales, fourth quarter revenue grew sharply to a record $91 million, an increase of 36% year over year and 45% quarter over quarter.

Judd Schmid: Starting with consolidated sales, Q4 revenue grew sharply to a record CAD 91 million, an increase of 36% year-over-year and 45% quarter-over-quarter. Our Video and Broadband Solutions segment contributed a record CAD 80.1 million of this revenue, up 38% year-over-year and 53% higher than in Q3. Our next generation Entra DAA products remained the key revenue driver in our VBS segment, with record Entra sales of CAD 77.3 million, growing 42% year-over-year and 57% on a sequential quarterly basis. Commercial video sales added another CAD 2.8 million to our VBS results in the quarter, reflecting the continued transition to next generation platforms, as well as some of our newer DAA-driven commercial video products now included in our Entra family revenues.

Speaker #3: Our video and broadband solution segment contributed a record $80.1 million of this revenue, up 38% year over year and 53% higher than in Q3.

Speaker #3: Our next-generation enter DAA products remained the key revenue driver in our VBS segment, with enter sales record enter sales of 77.3 million growing 42% year over year and 57% on a sequential quarterly basis.

Speaker #3: Commercial video sales added another $2.8 million to our VBS results in the quarter, reflecting the continued transition to next-generation platforms, as well as some of our newer DAA-driven commercial video products now included in our Enter family revenues.

Speaker #3: In our content delivery and storage segment, fourth quarter revenues came in at $10.8 million, up 26% from the same period last year and 1% higher than in Q3.

Judd Schmid: In our Content Delivery and Storage segment, Q4 revenues came in at CAD 10.8 million, up 26% from the same period last year and 1% higher than in Q3. Q4 CDS revenue included CAD 4.9 million in product sales and CAD 5.9 million in service revenues. As we typically note, quarterly fluctuations are typical for the CDS segment. Gross margin improved significantly in Q4 to 45.4%, up from 26.3% in Q4 last year, and adjusted gross margin rose to 45% in Q4, up from 36.7% in Q4 of fiscal 2025. That strong year-over-year improvement largely reflects the absence of last year's significant inventory write-down and unfavorable product mix, along with a greater proportion of higher margin Entra optical, and software sales in this year's mix.

Speaker #3: Fourth quarter CDS revenue included $4.9 million in product sales and $5.9 million in service revenues. As we typically note, quarterly fluctuations are typical for the CDS segment.

Speaker #3: Gross margin improved significantly in the fourth quarter to 45.4%, up from 26.3% in the fourth quarter last year. Adjusted gross margin rose to 45% in Q4, up from 36.7% in the fourth quarter of fiscal '25.

Speaker #3: That strong year-over-year improvement largely reflects the absence of last year's significant inventory write-down and unfavorable product mix, along with a greater proportion of higher-margin enter optical and software sales in this year's mix.

Speaker #3: Sequentially, both gross margin and adjusted gross margin were somewhat lower than in Q3, reflecting a modestly less favorable product mix. Turning now to fourth quarter operating expenses on a year over year basis, opex of 29 million dollars was down 5.7 million year over year, and on a sequential basis, increased slightly by $600,000 from Q3.

Judd Schmid: Sequentially, both gross margin and adjusted gross margin were somewhat lower than in Q3, reflecting a modestly less favorable product mix. Turning now to Q4 operating expenses on a year-over-year basis, OPEX of CAD 29 million was down CAD 5.7 million year-over-year, and on a sequential basis increased slightly by CAD 600,000 from Q3. R&D expenses for Q4 increased to CAD 12.6 million, or 14% of sales, from CAD 11.7 million or 18% of sales last year. This was primarily a result of higher amortization of deferred development costs as more of our development investments moved into commercial production. This is offset by higher capitalized development costs related to our future product offerings. As we mention each quarter, we defer some of our R&D expenditures to future periods until our products begin commercialization, and so reported R&D expense in a period is typically different than the actual cash outlay.

Speaker #3: R&D expenses for the fourth quarter increased to $12.6 million, or 14% of sales, from $11.7 million, or 18% of sales last year.

Speaker #3: This was primarily a result of higher amortization of deferred development costs, as more of our development investments moved into commercial production. This is offset by higher capitalized development costs related to our future product offerings.

Speaker #3: As we mention each quarter, we defer some of our R&D expenditures to future periods until our products begin commercialization. As a result, reported R&D expense in a period is typically different from the actual cash outlay.

Speaker #3: Adjusting for this, our actual cash R&D investment was 16.9 million dollars or 19% of revenues in the fourth quarter, up from 15.3 million dollars or 23% of revenues a year ago, as we continue to prioritize our investment in future product development and our innovation pipeline.

Judd Schmid: Adjusting for this, our actual cash R&D investment was CAD 16.9 million, or 19% of revenues in Q4, up from CAD 15.3 million or 23% of revenues a year ago as we continue to prioritize our investment in future product development and our innovation pipeline. Sales and marketing expenses decreased slightly to CAD 9.2 million or 10% of sales from CAD 9.4 million, or 14% of sales last year, reflecting operating leverage in our sales and marketing cost base and continued discipline in variable selling costs. G&A expenses of CAD 6.7 million or 7% of sales were up from CAD 6.2 million or 9% of sales in the same period last year. We remain focused on closely monitoring our operating expenses, and we don't anticipate significant OPEX increases in the near term. Continued discipline on our OPEX is a key part of how we get to our bottom line financial goals.

Speaker #3: Sales and marketing expenses decreased slightly to $9.2 million, or 10% of sales, from $9.4 million, or 14% of sales last year, reflecting operating leverage in our sales and marketing cost base and continued discipline in variable selling costs.

Speaker #3: And G&A expenses of $6.7 million, or 7% of sales, were up from $6.2 million, or 9% of sales, in the same period last year.

Speaker #3: We remain focused on closely monitoring our operating expenses, and we don't anticipate significant OPEX increases in the near term. Continued discipline on our OPEX is a key part of how we get to our bottom line financial goals.

Speaker #3: We continue to incur interest expense related to our revolving line of credit, other debt, and accounts receivable factoring programs. With debt levels expected to come down and cash flow continuing to improve, we anticipate lower interest expense in 2027.

Judd Schmid: We continue to incur interest expense related to our revolving line of credit, other debt, and accounts receivable factoring programs. With debt levels expected to come down and cash flow continuing to improve, we anticipate lower interest expense in 2027. A quick note on taxes. Our effective tax rate of 41% is higher than usual, primarily due to the write-offs of the BC generated investment tax credits in Canada related to our telematics business and provision to return adjustments in both Canada and the US. That being said, we pay virtually no cash taxes in fiscal 2026 thanks to our substantial bank of tax attributes in Canada and also changes to the US tax laws regarding the deductibility of R&D expenses.

Speaker #3: A quick note on taxes: our effective tax rate of 41% is higher than usual, primarily due to the write-offs of the BC-generated investment tax credits in Canada related to our telematics business, and provision-to-return adjustments in both Canada and the US.

Speaker #3: That being said, we paid virtually no cash taxes in fiscal '26, thanks to our substantial bank of tax attributes in Canada and also changes to the U.S. tax laws regarding the deductibility of R&D expenses.

Speaker #3: We may see some cash taxes in the US in fiscal '27, depending upon how results come in, but we expect our effective tax rate to be much lower than this past quarter.

Judd Schmid: We may see some cash taxes in the US in fiscal 2027, depending upon how results come in, but we expect our effective tax rate to be much lower than this past quarter. Turning to the bottom line, we significantly strengthened Q4 operating income to CAD 12.3 million, compared with a loss of CAD 17.1 million in the same period last year. The CAD 29.4 million improvement primarily reflects higher VBS segment sales combined with lower impairment expense and inventory allowances as compared with a year ago. Net income also improved this quarter, coming in at CAD 5.4 million or CAD 0.22 a share from a net loss of CAD 13.3 million or CAD 0.55 loss per share in Q4 of fiscal 2025. A huge improvement. Adjusted earnings per share for Q4 grew to CAD 0.21 per share from a loss of CAD 0.06 per share last year.

Speaker #3: Turning to the bottom line, we significantly strengthened fourth-quarter operating income to $12.3 million, compared with a loss of $17.1 million in the same period last year.

Speaker #3: The $29.4 million improvement primarily reflects higher VBS segment sales combined with lower impairment expense and inventory allowances, as compared with a year ago.

Speaker #3: Net income also improved this quarter, coming in at $5.4 million, or $0.22 a share, from a net loss of $13.3 million, or a loss of $0.55 per share in the fourth quarter of fiscal '25—a huge improvement.

Speaker #3: Adjusted earnings per share for the fourth quarter grew to $0.21 per share from a loss of $0.06 per share last year. Now, turning to the balance sheet, working capital continues to improve, with working capital being $62.9 million at June 30, 2026, which increased from $51.2 million at June 30, 2025, reflecting our efforts to pay down our debt.

Judd Schmid: Now turning to the balance sheet, working capital continues to improve, with working capital being CAD 62.9 million at 30 June 2026, which increased from CAD 51.2 million at 30 June 2025, reflecting our efforts to pay down our debt. Cash flow provided by operations for Q4 increased to CAD 24.8 million from CAD 18.9 million during the same period last year, driven mainly by current period results rather than changes in working capital. Finally, our net debt position, defined as total debt less cash and lease liabilities, continues to improve. At year-end, our total net debt stood at CAD 40.7 million, which is down from CAD 54.4 million at the end of Q3. Going forward, we will keep focusing on strengthening our balance sheet through further debt reductions.

Speaker #3: Cash flow provided by operations for the fourth quarter increased to 24.8 million dollars from 18.9 million dollars during the same period last year. Driven mainly by current period results, rather than changes in working capital.

Speaker #3: Finally, our net debt position, defined as total debt less cash and lease liabilities, continues to improve. At year-end, our total net debt stood at $40.7 million, which is down from $54.4 million at the end of Q3. Going forward, we'll keep focusing on strengthening our balance sheet through further debt reductions.

Speaker #3: On a final note, the board of directors approved a quarterly dividend of 5.5 cents per common share, payable on November 9th to shareholders of record as of October 16th, 2026.

Judd Schmid: On a final note, the board of directors approved a quarterly dividend of CAD 0.055 per common share, payable on 9 November to shareholders of record as of 16 October 2026. It is important to note that this dividend will be designated as an eligible dividend for Canadian income tax purposes. Now back to Sumit.

Speaker #3: It's important to note that this dividend will be designated as an eligible dividend for Canadian income tax purposes. Now back to Cement.

Speaker #1: Thank you, Judd. Our long-term strategy of positioning Vecima at the forefront of a transforming industry is translating into the strong and profitable growth we saw in the fourth quarter.

Sumit Kumar: Thank you, Judd. Our long-term strategy of positioning Vecima at the forefront of a transforming industry is translating into the strong and profitable growth we saw in Q4, and we are confident this is just the beginning of the growth ahead. You will recall that in our last outlook, we raised our projection for calendar 2026 revenue growth to 22.5% to 30%. Today, we increased that further, with calendar 2026 revenue expectations now rising to 27% to 32% growth versus calendar 2025. Looking further ahead, we expect our momentum to keep building through fiscal 2027, with a revenue growth outlook of 30% to 35% versus fiscal 2026. Based on our projected demand profile, we are also anticipating a very strong adjusted EBITDA margin of approximately 20% in both calendar 2026 and fiscal 2027.

Speaker #1: And we're confident this is just the beginning of the growth ahead. You'll recall that in our last outlook we raised our projection for calendar 26 revenue growth to 22.5, 30%.

Speaker #1: Today, we increased that further, with calendar 2026 revenue expectations now rising to 27% to 32% growth versus calendar 2025. Looking further ahead, we expect our momentum to keep building through fiscal 2027, with the revenue growth outlook of 30% to 35% versus fiscal 2026.

Speaker #1: Based on our projected demand profile, we're also anticipating a very strong adjusted EBITDA margin of approximately 20% in both calendar '26 and fiscal '27.

Speaker #1: We expect, of course, our growth to be led by our Video and Broadband Solutions segment, as we continue to support both our lead tier-one and 76 other customers in their wide-scale DAA network deployments.

Sumit Kumar: We expect, of course, our growth to be led by our Video and Broadband Solutions segment as we continue to support both our lead Tier 1 and 76 other customers in their wide-scale DAA network deployments. These are major multi-year upgrade programs encompassing our Entra Remote PHY products, including our EN9000 and ERM RPD platforms, and our Entra optical fiber access platform centered around fiber to the home remote OLT nodes. We are building on our revenue base as we increase deployment of newer Entra products across multiple customers. Those include, for example, the EN3400, a new smaller version of the EN9000 GAP node, the EEM210 standalone 10 gig EPON module, and our Power over Ethernet modules. As we move forward, our fiber access products are playing an increasingly important role as operators expand fiber to the home deployments and invest in next-gen architectures.

Speaker #1: These are major multi-year upgrade programs, encompassing our enter remote 5 products, including our EN 9000 and RPD platforms, and our enter optical fiber access platform, centered around fiber to the home remote OLT nodes.

Speaker #1: And we're building on our revenue base as we increase deployment of newer enter products across multiple customers. Those include for example the EN 3400, a new smaller version of the EN 9000 gap node, the EM 210 standalone 10 gig epon module, and our power hole rover modules.

Speaker #1: So as we move forward, our fiber access products are playing an increasingly important role as operators expand fiber to the home deployments and invest in next-gen architectures.

Speaker #1: As a recognized leader in remote OLT technology, and with support for standards like XGS-PON and the emerging 50G PON, as well as all PON architectures, we're ideally positioned to be a major player in the global expansion of fiber-to-the-home networks.

Sumit Kumar: As a recognized leader in remote OLT technology, and with support for standards like XGS-PON and the emerging 50G-PON and All-PON architectures, we are ideally positioned to be a major player in the global expansion of fiber to the home networks. In our Content Delivery and Storage segment, we are anticipating steady overall operating performance as we continue to focus on driving revenue growth through both managed IPTV expansions and our rollout of DAI. Beginning next quarter, results in this segment will encompass our commercial video portfolio, including Terrace IQ, which is expected to start providing meaningful contribution as the 2027 fiscal year progresses.

Speaker #1: In our content delivery and storage segment, we're anticipating steady overall operating performance as we continue to focus on driving revenue growth through both managed IPTV expansions and our rollout of DAI.

Speaker #1: And beginning next quarter, results in this segment will encompass our commercial video portfolio, including Terrace IQ, which is expected to start providing meaningful contribution as the 2027 fiscal year progresses.

Speaker #1: So that change in the segment lines with—aligns our reporting segments going forward with the sales execution and the market characteristics that are common between our Media Scale IP Video platforms and the Terrace portfolio.

Sumit Kumar: That change in the segments aligns our reporting segments going forward with the sales execution and the market characteristics that are common between our MediaScale IP video platforms and the Terrace portfolio, while also providing some more direct visibility into results for our cable and fiber broadband platforms. As of next quarter, the two operating segments we report under will be Content Delivery Solutions and Broadband Access Solutions. As we enter fiscal 2027, fresh off all-time highs in revenue and adjusted EBITDA, we see a broad and compelling growth runway ahead. Vecima's continued expansion across new platforms, design wins, and customer relationships, together with a network footprint that is underpinning broadband access for millions of homes and businesses worldwide, positions us for continued momentum for years to come.

Speaker #1: While also providing some more direct visibility into results for our cable and fiber broadband platforms. So, as of next quarter, the two operating segments we report under will be Content Delivery Solutions and Broadband Access Solutions.

Speaker #1: As we enter fiscal 27, fresh off all-time highs in revenue and adjusted EBITDA, we see a broad and compelling growth runway ahead. Vecima's continued expansion across new platforms design wins and customer relationships together with the network footprint that's underpinning broadband access for millions of homes and businesses worldwide.

Speaker #1: Positions us for continued momentum for years to come. Notably, our 30 to 35% growth outlook for fiscal year 27 contemplates only the early stages of contribution from enter of ECMTS and DOCSIS 4.0 RPDs, XGS PON, and several other platforms now entering the market, which we expect will be increasingly meaningful drivers of performance in fiscal 28 and beyond.

Sumit Kumar: Notably, our 30% to 35% growth outlook for fiscal year 2027 contemplates only the early stages of contribution from Entra vCMTS and DOCSIS 4.0 RPDs, XGS-PON, and several other platforms now entering the market, which we expect will be increasingly meaningful drivers of performance in fiscal 2028 and beyond. Our broad and innovative portfolio of interoperable cable and fiber broadband access products and IPTV solutions gives us multiple engines for growth, with Vecima at the forefront of the technology shaping future network architectures. Against that backdrop of accelerating widescale multi-gig broadband adoption, Vecima is ideally positioned to remain a leader in a multi-year infrastructure investment pipeline as it grows to greater scale. We have never been more confident in Vecima's future.

Speaker #1: Our broad and innovative portfolio of interoperable cable and fiber broadband access products and IPTV solutions gives us multiple engines for growth. With Vecima at the forefront of the technology shaping future network architectures.

Speaker #1: And against that backdrop of accelerating wide scale multi-gig broadband adoption, Vecima is really ideally positioned to remain a leader in a multi-year infrastructure investment pipeline as it grows to greater scale.

Speaker #1: We've never been more confident in Vecima's future. The opportunities before us are substantial, with multiple catalysts across our product portfolio and customer base still in the early stages of realization.

Sumit Kumar: The opportunities before us are substantial, with multiple catalysts across our product portfolio and customer base still in the early stages of realization, and we look forward to executing on them and reporting on our progress in the periods ahead. That concludes our formal comments for today. We would now be happy to take questions. Operator?

Speaker #1: And we look forward to executing on them and reporting on our progress in the periods ahead. That concludes our formal comments for today. We'd now be happy to take questions.

Speaker #1: Offered?

Speaker #2: Thank you. We will now begin the question and answer session for analysts and institutional investors. To join the question queue, you may press star, then one on your telephone keypad.

Operator: Thank you. We will now begin the question and answer session for analysts and institutional investors. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. The first question will come from Jim Byrne with Acumen Capital. Please go ahead.

Speaker #2: You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two.

Speaker #2: We will pause for a moment as callers join the queue. The first question will come from Jim Burn with Acumen Capital. Please go ahead.

Speaker #3: I think we're good here.

Speaker #4: Yeah, good morning, guys. Just thinking about production capacity and your exposure to US tariffs. I know you had moved some manufacturing down there in the past couple of years.

Jim Byrne: Yeah. Good morning, guys. Just thinking about production capacity and your exposure to US tariffs. I know you have moved some manufacturing down there in the past couple of years, pushing here CAD 400 million in sales annualized. Just thoughts on further requirements to move manufacturing down there or maybe just commentary on production capacity today and how that positions you for the tariff situation.

Speaker #4: Kind of pushing here $400 million in sales, annualized. Just thoughts on further requirements to move manufacturing down there, or maybe just commentary on production capacity today and how that positions you for the tariff situation.

Speaker #1: Yeah, yeah, thanks, Jim. So, yeah, I think I've said for some time that we've envisioned the upcoming growth here, and the production capacity is well situated for that, both in our Canadian operations as well as our international partners and contract manufacturing.

Sumit Kumar: Yeah. Thanks, Jim. I have said for some time that we have envisioned the growth upcoming here and the production capacity is well situated for that, both in our Canadian operations as well as our international partners in contract manufacturing. We believe we have set up for the scale that is required very well there. There is room to add further shifts into that manufacturing operation. That team has been built up to do so. From the perspective of the revenue envelope, we have a lot of growth that we can work towards ahead. I think on the tariff side, like many other companies, not just those with this large Canadian presence, but all around the world, global companies have faced a bit of this heightened uncertainty since early 2025 with how the US is shifting their approach to trade.

Speaker #1: So we believe we've set up for the scale that's required. Very well there and, you know, there's room to add further shifts. Into that and into that, you know, manufacturing operation that team's been built up to do so.

Speaker #1: So, you know, from the perspective of the revenue envelope, we've got a lot of growth that we can work towards ahead.

Speaker #1: So I think on the tariff side, you know, like many other companies, you know, not just those with this large Canadian presence, but, you know, all around the world, you know, global companies have faced a bit of this heightened uncertainty since early '25 with how the US is shifting their approach to trade.

Speaker #1: You know, and while the nature of our industry does mean at the moment that a high amount of our sales, of course, are to US customers, I think what I've tried to outline since the beginning of that changing environment is that, you know, we, Vecima, have always been very strategically well-positioned by design.

Sumit Kumar: While the nature of our industry does mean at the moment that a high amount of our sales, of course, are to US customers, I think what I have tried to outline since the beginning of that changing environment is that Vecima has always been very strategically well-positioned by design. For almost 40 years now, we have been this broadband technology leader. We have always maintained full control and ownership, and in-house designed IP in our manufacturing process. In addition, of course, to the IP in our design and product designs in software and hardware. That is a bit of a contrast to other organizations that might completely outsource their manufacturing. Vecima has always owned that process and all the designs thereof.

Speaker #1: You know, for almost 40 years now, we've been this broadband technology here, we've always maintained full control and ownership. And in-house designed IP in our manufacturing process.

Speaker #1: So in addition, of course, to the IP in our design and design product designs and software and hardware. So that's a bit of a contrast to, you know, that to other organizations that might completely outsource their manufacturing, but Vecima's always owned that process and all the designs that are up.

Speaker #1: So the reasons for that, you know, have been many not just on the trade side, but we have this complete agility and volumes in the production and product mix.

Sumit Kumar: The reasons for that have been many, not just on the trade side, but we have this complete agility in volumes, in the production and product mix, quick turns on design changes, and the ability that we have to manage through and pivot around some of the supply chain challenges that we have seen in recent years between the pandemic and the memory stuff that is going on, the integration of acquisitions we have done, where we have already exercised that capability to move the manufacturing several times and as we have digested and integrated those acquisitions. I think all that is to say is, as this heightened trade uncertainty came up in the US, we had this very strong inherent capability to manage it as in the way that we have always built our products, again, where we own that complete design manufacturing process.

Speaker #1: You know, quick turns on design changes, and the ability that we have to, you know, manage through and pivot around some of the supply chain challenges that we've seen in recent years, between the pandemic and the memory stuff that's going on.

Speaker #1: The integration of acquisitions we've done where we've already exercised that capability to move manufacturing several times as we've digested and integrated those acquisitions. So you know, I think all that is to say as this heightened trade uncertainty came up in the US, you know, we had this very strong inherent capability to manage it as, you know, in the way that we've always built our products again where we own that complete design manufacturing process.

Speaker #1: So the most recent situation with the tariffs that came into effect in the summer, we've already made any needed adjustments. And those are actually quite minor in practice.

Sumit Kumar: The most recent situation with the tariffs that came into effect in the summer, we have already made any needed adjustments, and those were actually quite minor in practice. As unpredictable as that environment may be going forward, region by region, and how the US is doing trade, given where we are at today, what we have said with our outlook, it encompasses anything that is applicable. It is quite narrow in scope in terms of exposure there. Our overall sales profile has got that well managed and, in isolated cases that there are some tariffs that are in effect, our ASPs have handled that well and with a small exposure while still being totally competitive, and gaining the market share anyway. Overall, we are quite satisfied with how we are positioned, and this core competency again has allowed us to be agile there.

Speaker #1: And, you know, as unpredictable as that environment may be going forward region by region and how the US is doing trade, you know, given where we're at today, what we've said with our outlook, it encompasses anything that's applicable.

Speaker #1: It's quite narrow. Scope in terms of exposure there. And, you know, our overall sales profile has got that well managed and, you know, in the isolated cases that there are some tariffs that are in effect, you know, our ASPs have handled that well and, you know, with a small exposure, well, still being totally competitive.

Speaker #1: And gaining the market share anyway. So overall, you know, we're quite satisfied with how we're positioned and this core competency again has allowed us to be agile there.

Speaker #4: Okay, that's really helpful. And then maybe for you, Judd, just thinking about, you know, with this ramp-up in growth and sales, maybe just talk about the working capital here for fiscal '27.

Jim Byrne: Okay, that's really helpful. Maybe for you, Judd, just thinking about with this ramp-up in growth and sales, talk about the working capital here for fiscal 2027. I would assume that you probably need some investment, maybe just in inventories, and change in AR, but help me understand that working capital situation.

Speaker #4: I would assume that you'd probably need some investment, maybe just in inventories and changes in accounts receivable, but maybe you could help me understand that working capital a bit more.

Speaker #5: Yeah, Jim, we see steady growth over the quarters of the year, with really not a lot of growth in inventory, other than to, you know, just make sure we have the goods on hand to get them back out the door.

Judd Schmid: Yeah, Jim, we see a steady growth over the quarters of the year with really not a lot of growth in inventory other than to just make sure we have the goods on hand to get them back out the door. But it's not going to be anything like it was a couple of years ago where things got a little large on that side. AR will naturally grow depending upon timing of when those sales take place. But overall, we should be generating cash, paying down our debts, and using those funds to reinvest in the company. But we do see some working capital improvements throughout the year.

Speaker #5: But it's not going to be anything like it was a couple of years ago where things got a little large on that side. You know, AR will naturally grow depending upon timing of when those sales take place.

Speaker #5: But overall, we should be generating cash, paying down our debts, and using those funds to reinvest in the company. We do see some working capital improvements throughout the year.

Speaker #4: Okay. And then maybe just lastly, Sumit, I guess, you know, obviously, visibility must be good with your revised outlook. Maybe, what could go wrong?

Jim Byrne: Okay, then maybe just lastly, Sumit, I guess obviously visibility must be good with your revised outlook. What could go wrong? We've had some hiccups in the past with some major customers shifting their plans. Would that potentially happen again? Or you just feel like you've got enough of a broad-based exposure now that no single customer can really sideline this outlook?

Speaker #4: You know, we've had some hiccups in the past with some major customers kind of shifting their plans. Would that potentially happen again or are you just feel like you've got enough kind of a broad-based exposure now that no single customer can really sideline this outlook?

Speaker #1: No, I think it's more on the latter side, that we've got this broad base. I think, you know, I mentioned that we have 77 customers in the enter platforms today.

Sumit Kumar: No, I think it's more on the latter side, that we've got this broad base. I think, I mentioned that, we have 77 customers into the Entra platforms today. Yeah, I think you're right. It's taken a lot of time for the industry to get to this phase, where we're accelerating the rollout of cable access and fiber access all across the industry. Of course, I think complex programs, a lot of planning, a lot of qualification that the industry has gone through, our customers have gone through, over the last several years. So that's behind us and you've seen that show up in our results. So, we think that the industry is on the move on this transformation. It's mandatory to go to multi-gig. It's mandatory for operators to be competitive with their offerings. AI traffic is doubling the capacity need of the broadband access network going forward.

Speaker #1: And yeah, I think you're right. It's taken a lot of time for the industry to get to this phase, where we're accelerating the rollout of cable access and fiber access all across the industry.

Speaker #1: Of course, you know, I think complex programs a lot of planning, a lot of qualification that the industry has gone through our customers have gone through over the last several years.

Speaker #1: So that's behind us. And, you know, you've seen that show up in our results. So, we think that the industry is on the move with this transformation.

Speaker #1: It's mandatory to go to multi-gig. It's mandatory for operators to be competitive with their offerings. AI traffic is, you know, doubling the capacity of the broadband the capacity need of the broadband access network going forward.

Speaker #1: So you know, the industry has to move. We're on that now. You know, 77 customers. And, you know, we expect things to be more broad-based and some of those challenges have been overcome that we encountered in the past as an industry.

Sumit Kumar: The industry has to move. We are on that now, 77 customers, and we expect things to be more broad-based, and some of those challenges have been overcome that we encountered in the past as an industry.

Speaker #4: Okay. Thanks, guys.

Jim Byrne: Okay. Thanks, Chris.

Speaker #1: Thanks, Jim.

Sumit Kumar: Thanks, Jim.

Speaker #2: The next question will come from Stephen Lee with Raymond James. Please go ahead.

Operator: The next question will come from Stephen Lee with Raymond James. Please go ahead.

Stephen Lee: Hey, thanks. Can I ask you about BEAD? Is there any activity at this point?

Steven Lee: Hey, thanks. Can I ask you about BEAD? Is there any activity at this point?

Speaker #6: Hey, thanks. Can I ask you about beads? Like, is there any activity at this point?

Speaker #1: Yeah, I think BEAD has gone through its scenario in terms of, you know, the differing U.S. administrations and their handling of that. Some awards have been made.

Sumit Kumar: Yeah. I think BEAD has gone through its scenarios in terms of the differing US administrations and their handling of that. Some awards have been made in the last year and a half or so. Our customers are also participating. We do expect some contribution to enter the picture through fiscal 2027. I think still, predominantly, the RDOF program is ongoing. That's the primary subsidy program that our customers are leveraging, and doing really well with. I want to point out that, some of the greenfield fiber build has become a very meaningful component of our Entra optical sales and uptake from customers today. We're also seeing new subdivisions. We're seeing areas where it makes commercial sense for them to have a close drop of fiber all the way to the premise. That's happening at a broader pace today. Subsidy activity is ongoing.

Speaker #1: In the last year, year and a half or so, our customers are also participating. You know, so we do expect some contribution to enter the picture through fiscal '27.

Speaker #1: I think, you know, still, predominantly, the ART program is ongoing. That's the primary subsidy program that our customers are leveraging, and doing really well with.

Speaker #1: But also, I want to point out that, you know, some of the greenfield fiber build has become a very meaningful component of our enterprise optical sales and uptake from customers today.

Speaker #1: So we're also seeing, you know, new subdivisions. We're seeing areas where it makes commercial sense for them to, you know, have a close drop of fiber all the way to a premise.

Speaker #1: That's happening at a broader, you know, pace today. So, you know, subsidy activity is ongoing. Bead is, you know, yet to come. We're probably, you know, not too consequential for us within the boundary of fiscal '27, but I think, you know, it's reaching the culmination of all this churn in terms of, you know, getting to the point of the US rolling out.

Sumit Kumar: BEAD is yet to come, but probably not too consequential for us within the boundary of fiscal 2027. I think, it's reaching the culmination of all this churn in terms of getting to the point of the US rolling out.

Stephen Lee: Can it become consequential beyond 2027 or just relative to RDOF it's not going to be the same kind of for your customers, it's not going to be the same kind of magnitude?

Steven Lee: Can it become consequential beyond 2027 or just relative to RDOF it's not going to be the same kind of for your customers, it's not going to be the same kind of magnitude?

Speaker #6: Can you, Sumit, can you become consequential? Like, beyond '27, or just relative to—out of—it’s not going to be the same kind of, for your customers, it’s not going to be the same kind of magnitude?

Speaker #1: You know, I think our customers are reviewing it as, you know, an incremental piece that, you know, helps for some subsidies. You know, I don't think it's going to be as material for them as, you know, as a whole. Lots of new passages are going to roll out on BEAD.

Sumit Kumar: I think our customers are viewing it as an incremental piece that helps for some subsidies. I don't think it's going to be as material for them as RDOF. As a whole, lots of new capacity are going to roll out on Broadband Equity, Access, and Deployment. We've got a very broadly applicable platform, both our 10 gig EPON and our XGS-PON moving to 50G-PON solutions. The current customer set maybe a little more focused on greenfield than RDOF, but as the Broadband Equity, Access, and Deployment rollout starts to happen, we're excited about how that plays into the overall TAM for ITU PON, XGS-PON, and how we can participate there in that much larger TAM.

Speaker #1: We've got a very, you know, broadly applicable platform, both our 10 gig EPON and our XGS-PON, moving to 50 gig PON solutions. So, you know, the current customer set, you know, maybe a little more focused on greenfield than our off, but, you know, as the BEAD rollout starts to happen, we're excited about how that plays into the overall TAM for ITU PON, XGS-PON, and how we can participate there in that much larger TAM.

Speaker #6: Okay, got it. Thanks. And can I miss what you said on VCMTS? Like, how many customers in trials? And I guess you have two tier ones generating revenues.

Stephen Lee: Okay. Got it. Thanks. I missed what you said on vCMTS, how many customers in trials, and I guess you have two tier 1s generating revenues, is that right?

Steven Lee: Okay. Got it. Thanks. I missed what you said on vCMTS, how many customers in trials, and I guess you have two tier 1s generating revenues, is that right?

Speaker #6: Is that right?

Speaker #1: Oh, yeah, we talked about seven overall customer design wins you could call them. The tier ones are moving forward and deepening trials, you know, through calendar 2026.

Sumit Kumar: Oh, yeah. We talked about seven overall customers, design wins you could call them. The tier 1s are moving forward and deepening trials through calendar 2026, leading to likelihood of some, in fact, customer-facing market trials in some major markets this year. I think you need to think about. When I said seven, there's the two tier 1s we've talked about, the lead. We announced Videotron recently, that has selected us as well, with an agreement there for vCMTS. That's all in the future. Actually, I think when we talk about the 30% to 35% growth and below for fiscal 2027, actually there's not too much contribution from vCMTS, or even XGS within those results yet. So that we see as being a more meaningful growth driver in fiscal 2028 and beyond. The five other customers are some smaller customers.

Speaker #1: Leading to, you know, the likelihood of some, in fact, customer-facing market trials in some major markets this year. So, I think you need to think about...

Speaker #1: And then in, you know, when I said seven, there's a two tier ones we've talked about the lead. We announced video trend recently that has selected us as well.

Speaker #1: With an agreement there for VCMTS. That's all in the future. You know, and actually I think when we talk about the 30, 35% growth envelope for fiscal '27, you know, actually there's not too much contribution from VCMTS or even XGS within those results yet.

Speaker #1: So, we see that as being a more meaningful growth driver in fiscal '28 and beyond. And then, the five other customers are some smaller customers, with us racking those up pretty quickly today.

Sumit Kumar: We're racking those up pretty quickly today. Some of those are already into deployment.

Speaker #1: Some of those are already into deployment.

Speaker #6: Okay, thank you.

Stephen Lee: Okay. Thank you.

Steven Lee: Okay. Thank you.

Speaker #1: Thanks, Steven.

Sumit Kumar: Thanks, Stephen.

Speaker #2: Once again, analysts and institutional investors who would like to ask a question should press star one on their touch-tone phone. We will pause for a moment so any additional callers may join the queue.

Operator: Once again, analysts and institutional investors who would like to ask a question should press star and one on their touchtone phone. We will pause for a moment so any additional callers may join the queue. As there appear to be no further questions, this concludes today's conference call. You may now disconnect your lines. Thank you for participating and have a pleasant day.

Speaker #2: As there appear to be no further questions, this concludes today's conference call. You may now disconnect your lines. Thank you for participating and have a pleasant day.