Vistance (VISN) Q4 2025 Earnings Call Transcript

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DATE

Feb. 26, 2026, at 8:30 a.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Charles L. Treadway
• Executive Vice President and Chief Financial Officer — Kyle D. Lorentzen
• Vice President, Investor Relations — Jenny Thompson

TAKEAWAYS

• Core Net Sales -- $515 million, increasing 24% year over year, driven by Aurora Networks and Ruckus Networks segment performance.
• Full-Year Net Sales -- $1.93 billion, up 40%, primarily from FDX amplifier deployments at Comcast, and Wi-Fi 7 product growth in Ruckus.
• Full-Year Adjusted EBITDA -- $292 million, up 1,095%; core adjusted EBITDA reached $379 million, a 176% increase.
• Cash Position -- Ended the quarter with $923 million, an increase of 31% from the prior quarter, and $218 million sequentially.
• Backlog -- $65 million at quarter-end, up 136% year over year, and 10% sequentially; order rates rose 38% sequentially.
• Special Distribution -- At least $10 per share declared, to be paid by April, as a return of capital following the CCS sale.
• Debt and Leverage Actions -- Proceeds from the CCS deal used to repay all existing debt and redeem preferred equity; post-deal net leverage ratio at 4.8x, with the intention of maintaining financial flexibility.
• Aurora Networks Revenue -- Full-year net sales were $1.23 billion, rising 47% due to DOCSIS 4.0 amplifier demand; Q4 net sales reached $347 million, up 33%.
• Aurora Networks Adjusted EBITDA -- $79 million in Q4, 112% higher, aided by amplifier revenue and stabilized legacy sales; full-year adjusted EBITDA increased 138% ($146 million).
• Aurora Segment New Product Wins -- Approved new node device offering both ESD and FDX technologies, to ship in 2026; new orders secured in Asia and Europe for remote OLT and PON chassis.
• Ruckus Networks Revenue -- $687 million for the year, up 32%; Q4 revenue up 16%; backlog rose 19% over 2024; deferred revenue from RuckusOne subscription up 93%.
• Ruckus Networks Adjusted EBITDA -- $20 million in Q4, down 22% due to increased sales investments and incentive compensation; full-year adjusted EBITDA reached $128 million, up 210%.
• Wi-Fi 7 Adoption Traction -- Ruckus gained market traction with Wi-Fi 7, winning deals in U.S. sports stadiums and a Middle East hospital, and launching an MDU AI wall-plate offering.
• 2026 Guidance -- Core business adjusted EBITDA projected at $350 million to $400 million; Ruckus segment expected to deliver low-teen percentage EBITDA growth, offset by EBITDA decline in Aurora as legacy mix normalizes.
• DDR4 Memory Supply -- Management expects about a $20 million impact to 2026 EBITDA from memory chip price increases, with most cost passed to customers, but some pricing lag.
• Customer Concentration -- Top three customers account for 40%-45% of business; Aurora has high customer concentration, Ruckus does not.
• Cost Structure and Margins -- Aurora segment: target adjusted EBITDA margin around 20%; Ruckus: low-20s EBITDA margin anticipated, with further fixed-cost leverage.
• Liquidity -- Total available liquidity at quarter-end was $1.54 billion.

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RISKS

• DDR4 memory chip shortages and cost inflation, with management stating, "we are dealing with the memory chip price increases, and we are passing on most of the price to our customer base, but there is a little bit of lag in our ability to pass it on," resulting in a $20 million expected EBITDA impact in 2026.
• Aurora Networks faces adjusted EBITDA decline in 2026 due to "legacy business revenue last year, which comes at a little bit higher margin than our DOCSIS 4.0," and stranded costs associated with the CCS transaction.
• Segment results subject to volatility; "Aurora Networks is a project-driven business with timing of projects driving some volatility in quarterly results."

SUMMARY

The CCS segment divestiture to Amphenol enabled Vistance Networks (NASDAQ:VISN) to repay all debt, redeem preferred equity, and declare a minimum $10 per share special cash distribution, positioning the company to focus on its broadband (Aurora) and enterprise (Ruckus) platforms. Management projects core adjusted EBITDA between $350 million and $400 million for 2026, with Ruckus expected to drive low-teen percentage EBITDA growth, and Aurora to experience EBITDA decline as high-margin legacy revenue normalizes. DDR4 memory supply constraints will reduce EBITDA by an anticipated $20 million in 2026, with excess costs only partially offset by price increases. Aurora Networks and Ruckus Networks segments both captured new customer wins, including major deployments in Asia, Europe, and the U.S. enterprise Wi-Fi vertical, while the balance sheet remains fortified with over $1.5 billion liquidity for continued operational flexibility.

• Management confirmed, "Order rates were up 38% sequentially in the fourth quarter." Backlog increased to $65 million, up $37 million, or 136%, from the prior year.
• Special distribution is expected to be classified as a return of basis for tax purposes, and paid no later than April.
• Segment-wide fixed-cost leverage and margin expansion are expected as revenue grows, and stranded CCS costs are wound down through 2026.
• Product mix shifts as DOCSIS 4.0 grows, and legacy Aurora sales contract will impact margin profiles for the Aurora segment despite rising revenue.

INDUSTRY GLOSSARY

• FDX Amplifier: Full Duplex DOCSIS amplifier, enabling simultaneous upstream and downstream data transmission in cable broadband networks.
• DOCSIS 4.0: A cable network standard increasing speed and capacity for broadband service providers; enables gigabit-class data rates.
• ESD: Extended Spectrum DOCSIS, a DOCSIS 4.0 technology supporting higher bandwidth over coaxial cable.
• OLT: Optical Line Terminal, a critical component in fiber optic broadband networks managing signal transmission and distribution.
• PON: Passive Optical Network, a fiber optic architecture delivering broadband to end-users without active components between the provider and subscriber.
• RuckusOne: Vistance Networks’ cloud-managed subscription service for networking hardware and software, including Wi-Fi and switching analytics.
• Stranded Costs: Overhead and operational expenses remaining after divesting or discontinuing a business segment, pending reallocation or elimination.

Full Conference Call Transcript

Jenny Thompson: Good morning, and thank you for joining us today to discuss Vistance Networks, Inc. 2025 Full Year and Fourth Quarter Results. I am Jenny Thompson, Vice President of Investor Relations for Vistance Networks, Inc. And with me on today’s call are Charles L. Treadway, President and CEO, and Kyle D. Lorentzen, Executive Vice President and CFO. You can find the slides that accompany this report on our Investor Relations website. Before I turn the call over to Charles, I have a few housekeeping items to review. Today, we will discuss certain adjusted or non-GAAP financial measures which are described in more detail in this morning’s earnings materials.

Reconciliations of our non-GAAP financial measures and other associated disclosures are contained in our earnings materials and posted on our website. Please see our recent SEC filings, which identify the principal risks and uncertainties that could affect future performance. Please note that some of our comments today will contain forward-looking statements based on the current view of our business, and actual future results may differ materially. All quarterly growth rates described during today’s presentation are on a year-over-year basis unless otherwise noted. I will now turn the call over to our President and CEO, Charles L. Treadway.

Charles L. Treadway: Thank you, Jenny. Good morning, everyone. I will begin on Slide 3. On January 9, we announced the closing of the CCS transaction to Amphenol. We are excited about this transaction as it allows us to manage our leverage situation and create significant value for shareholders. As a result of the transaction, we repaid all of our existing debt and redeemed the preferred equity after placing a modest amount of new leverage on Vistance Networks, Inc. Our global team of innovators and employees are trusted advisers who listen to customers first and then deliver value, pushing past what is possible. Vistance Networks, Inc. will shape the future of communications technology.

We deliver solutions that bring reliability and performance always in motion. Vistance Networks, Inc. will be the parent company of Aurora Networks, formerly known as the Access Network Solutions business, and Ruckus Networks. The company was renamed Vistance Networks, Inc. on 01/14/2026 as the CommScope name and brand conveyed with the CCS sale. We would then distribute the excess cash to our shareholders as a special distribution. Aurora Networks provides broadband network products. Aurora Networks’ comprehensive end-to-end product portfolio supports global service providers with innovative solutions. Ruckus Networks develops purpose-driven networking solutions enabling positive business outcomes in the world’s most demanding environments. An industry leader in innovation, the Ruckus Networks portfolio includes award-winning Wi-Fi, switching, and cloud-managed platforms.

Now I would like to give you an update on the fourth quarter and full year earnings on Slide 4. I am pleased to announce that in the fourth quarter, Vistance Networks, Inc. delivered core net sales of $1.93 billion. We ended the year with cash of $923 million, an increase of 31% from the prior quarter. For clarification, Vistance Networks, Inc. delivered core net sales of $515 million, a year-over-year increase of 24%, and core adjusted EBITDA of $99 million, a year-over-year increase of 55%. Core adjusted EBITDA ended the year at $379 million, an increase of $242 million, or 176%, compared to the prior year.

In addition to strong revenue and adjusted EBITDA in the fourth quarter, positive results were generated by strong performance by our Aurora Networks segment. On an annual basis, Vistance Networks, Inc. results include our two remaining businesses, Aurora and Ruckus. We beat our full year adjusted EBITDA guidance of $300 million to $375 million for core Vistance Networks, Inc. As we move into 2026, we are well positioned to continue to benefit from the upgrade cycles in both businesses. Based on our current visibility, we are projecting 2026 core business adjusted EBITDA in the $350 million to $400 million range.

Charles L. Treadway: I would now like to give you an update on each of our businesses. Starting with Aurora Networks, shipments in Q4 were strong. Our FDX amplifier deployment with Comcast continues to go well, and this is reflected in our results, and they have been qualified by another major operator as they ramp up their upgrade plans. The full year net sales ended at $1.23 billion, which increased $397 million, or 47%, compared to the prior year. These increases were primarily driven by the continued deployment of our new DOCSIS 4.0 amplifiers. We continue to make headway with our suite of next-generation ESD DOCSIS 4.0 amplifier and node products.

We had another record quarter of DOCSIS 4.0 amplifier shipments in the fourth quarter. We expect to begin shipping to them in 2026. Although we expect our legacy business to decline over time as customers continue to delay DOCSIS 4.0 upgrades, we expect legacy license sales to normalize in 2026, which could result in a decline in EBITDA. During the fourth quarter, we received approval for our node within a single device. This new node allows our customers to choose between either the 1.8 gigahertz ESD or FDX technology, expected to ship in 2026. This new product is now available and paves the way to DOCSIS 4.0.

In the quarter, we also continued development on our next-generation products and the rollout of our BCAP solution with multiple large European service providers. The solutions deployed also include a mix of Aurora Networks nodes and remote devices, as well as those from other vendors, demonstrating the flexibility of our standards-based solution across multiple operator environments. The network upgrades include Aurora Networks’ cloud-native vCAP evo, providing significant enhancements to the operator service offerings, including advancing our relationship with Altice Labs. We also won a significant new order in Asia with remote OLT and a new PON chassis order in Europe.

As stated before, we believe Aurora Networks is well positioned with decades of knowledge of our customers’ ecosystems and a broad array of new products for service providers to take advantage of the latest DOCSIS 4.0 upgrade cycle as well as evolving their legacy DOCSIS 3.1 networks.

Charles L. Treadway: Turning to Ruckus Networks, core Ruckus Networks full year revenue ended at $687 million, up $166 million, or 32%, compared to 2024. Revenue was up 16% in the fourth quarter compared to the prior year. Core Ruckus adjusted EBITDA of $20 million was down $5 million, or 22%, versus 2024. The decline in adjusted EBITDA was driven by our continued investment in sales and higher incentive compensation. One of the key drivers of our above-market growth was the approximately $30 million year-over-year investment in sales initiatives. Core Ruckus Networks adjusted EBITDA for the year was $128 million, which was up $86 million, or 210%, versus the prior year.

We are pleased with our revenue growth year over year, and the adjusted EBITDA we delivered, which allows us to invest in our strategic initiatives to fuel growth in 2026. In addition to our investment in sales, products, and technologies, we are pleased with our progress in our RuckusOne subscription business where we grew deferred revenue by 93%. We gained market traction with our Wi-Fi 7 solutions. As we continue to execute new commercial strategies within select verticals, we expect to continue to gain market share, as demonstrated by securing multiple deals in the fourth quarter, with major U.S. professional sports stadiums, and executed our vertical market strategy.

We continued our focus on providing purpose-driven networking solutions for our customers and support model, including projects for upgrading aging Wi-Fi 5 and switching infrastructure for a luxury boutique hotel group in Europe. Subsequent to year end, we were also awarded a deal for a hospital in the Middle East where we will implement a complete Wi-Fi 7 switching network refresh. Ruckus Networks unveiled the new Ruckus MDU suite featuring innovative AI and Wi-Fi 7 wall-plate solutions for high-density residential environments. This new suite of solutions meets stakeholder demands through its ability to combine enterprise-level Wi-Fi analytics with cloud simplicity and automation. This enables more devices per unit, lower latency, higher reliability, and a reduction in manual troubleshooting.

These outcomes will drive improved resident satisfaction. Ruckus Networks will provide its purpose-driven network solutions to the TGR Haas F1 Team. In January 2026, with our versatile and high-performing offering and pipeline of innovations, we began delivering cutting-edge connectivity across its factories in Kannapolis, North Carolina, Banbury, UK, and Maranello, Italy, allowing the team to deploy an advanced engineering solution and optimize operating cost with the ability to manage all locations remotely. Ruckus will be trusted to power critical race-day network operations to meet the demands of the pinnacle motorsport. We made progress across all of our initiatives in 2025, resulting in market share gains.

Ruckus is well positioned for growth in 2026 driven by continued demand for our Wi-Fi 7 product offering and our strategic go-to-market investments. We expect to continue to grow market share and deliver low-teen EBITDA growth in 2026. Before handing the call over to Kyle, I would like to address the DDR4 memory chip supply issue that is impacting most companies in our industry. As we navigate this situation, we are actively working on several countermeasures, including product reengineering, alternative chip supply, and price increases. Both of our businesses use these chips. As you are aware, supply of DDR4 memory has tightened, and we are experiencing availability and pricing impacts.

Vistance Networks, Inc. already has significant seasonality and variability in our quarterly results. As we have said in the past, due to the seasonality and project nature of our business, annual performance is the best measure. And with that, I would like to turn things over to Kyle to talk more about our full year and fourth quarter results. Thank you, Kyle, and good morning, everyone. I will start with an overview of our full year 2025 results on Slide 5.

Kyle D. Lorentzen: For the full year, Vistance Networks, Inc. reported net sales of $1.93 billion, an increase of 40% from the prior year, primarily driven by the FDX amplifier deployments at Comcast and growth in Ruckus driven by Wi-Fi 7 products and subscription services. Adjusted EBITDA from continuing operations was $292 million, which increased by 1,095%. Adjusted EPS was $0.77 per share versus $0.10 per share. For core Vistance Networks, Inc., which excludes the CCS business, we reported net sales of $5.7 billion, which increased 35% from prior year, with adjusted EBITDA of $1.3 billion for the full year 2025, which increased 90% from prior year.

We believe this is a better representation of our performance and future results as it excludes certain stranded costs and one-time write-offs that are included in the U.S. GAAP discontinued operations presentation. Vistance Networks, Inc. core adjusted EBITDA for the full year 2025 was $379 million, up 176% versus prior year. As Charles mentioned earlier, 2025 was a very strong year for us in all businesses with core revenue and adjusted EBITDA growth of 40% and 176%, respectively. As it relates to Vistance Networks, Inc., both Aurora and Ruckus rebounded well from weak 2024 results.

Aurora revenue grew 47% over 2024 as Aurora benefited from the start of FDX amplifier shipments as well as a strong year in legacy product licenses as delays continued in DOCSIS 4.0 upgrades. The stronger revenue resulted in Aurora adjusted EBITDA growth of $146 million, or 138%. We would expect a continued decline in legacy business in 2026 and beyond as DOCSIS 4.0 picks up momentum. In core Ruckus, we saw year-over-year revenue growth of 32% driven primarily by improving market conditions. The stronger revenue resulted in year-over-year adjusted EBITDA improvement of $86 million, or 210%.

Adjusted EBITDA in core Ruckus was helped by a roughly $10 million favorable net impact of one-time E&O benefits partially offset by higher incentive compensation. Turning now to our fourth quarter results on Slide 6. For Vistance Networks, Inc. continuing operations, net sales ended at $515 million, up $100 million, or 24% year over year. Fourth quarter ended stronger than we had expected. The increase in revenue drove continuing operations adjusted EBITDA for the fourth quarter to $99 million, up 55% versus prior year. Adjusted EPS for the fourth quarter was $0.17 per share versus $0.14 in 2024.

Vistance Networks, Inc. backlog ended the quarter at $65 million, up $37 million, or 136%, and up 10% sequentially versus the end of the third quarter 2025, which was expected due to strong fourth quarter shipments. Order rates were up 38% sequentially in the fourth quarter. Vistance Networks, Inc. core adjusted EBITDA ended the quarter at $632 million, down $15 million, or 2%, versus the end of 2025 as a result of higher Aurora Networks revenue. Turning now to our fourth quarter segment highlights on Slide 7. Full year segment highlights are on Slide 8. Please refer to Charts 7 and 8 to view both the Ruckus Networks and core Ruckus Networks results.

Starting with our Aurora Networks segment, fourth quarter net sales of $347 million increased 33% from the prior year. Aurora Networks adjusted EBITDA of $79 million was up $42 million, or 112%, from the prior year, driven by higher amplifier revenue and year-end license purchases, and we realized higher legacy product sales as customer inventory levels stabilized and DOCSIS 4.0 products increased. Aurora Networks is a project-driven business with timing of projects driving some volatility in quarterly results. We experienced a strong rebound in revenue and adjusted EBITDA in 2025, as our investments made over the last three years on product development positioned us for the pending upgrade cycle.

In addition to new products, Aurora realized strong legacy product sales in 2025. The business remains well positioned to take advantage of upgrade cycles while offsetting declines in the legacy business. As we have discussed in the past, both revenue and EBITDA are expected to decline sequentially, although Aurora adjusted EBITDA is expected to be up year over year in 2026, both from a revenue and EBITDA perspective. The expected decline in legacy products, and the impact of stranded costs, would result in Aurora adjusted EBITDA being down in 2026 versus 2025, partially offset by improving DOCSIS 4.0 revenue.

Core Ruckus net sales of $167 million increased by 16% versus 2024, and adjusted EBITDA in 2025 was impacted by our investment in sales and higher incentive compensation due to stronger-than-expected 2025 results. Core Ruckus backlog at the end of 2025 was 19% higher than 2024 ending backlog. We expect the stronger market conditions to remain in 2026. We continue to drive our vertical market strategies and new product initiatives and are well positioned to grow faster than the market as we move into 2026. First quarter revenue and adjusted EBITDA are expected to be in line with fourth quarter.

Finally, early in the first quarter, the activity of the segment was reported as discontinued operations while the assets and liabilities of the segment were reported as held for sale. Net sales of the segment were $1.0 billion in the fourth quarter and increased 38% from the prior year. Turning to Slide 9 for an update on cash flow. During the quarter, we generated cash from operations of $281 million and free cash flow of $255 million. As we stated during our third quarter earnings call, we completed the divestiture of the CCS segment to Amphenol. We expected cash to be up $250 million from where we started the year, and it ended up $260 million.

Turning to Slide 10 for an update on our liquidity and capital structure. During the fourth quarter, our cash and liquidity remained strong. We ended the quarter with $923 million in total available cash and liquidity of $1.54 billion. During the quarter, our cash balance increased by $218 million. In the quarter, we purchased no debt or equity on the open market. With our current excess cash and the addition of new modest leverage on Vistance Networks, Inc., we plan to distribute the excess cash to our shareholders as a special distribution. We expect the special distribution to be at least $10 per share and to be paid no later than April.

We expect the distribution to be a return of basis for tax purposes. Post-distribution, we expect to maintain ample liquidity and significant financial flexibility. As of 01/31/2026, post-CCS transaction, the company, including CCS, ended the quarter with a net leverage ratio of 4.8 times. I will conclude my prepared remarks with commentary around our expectations for 2026. We will continue to focus on running the businesses and delivering results. On the performance side, we experienced strong growth in 2025 in both segments. As Charles mentioned earlier, we are projecting adjusted EBITDA in the $350 million to $400 million range in 2026.

In our Vistance Networks, Inc. adjusted EBITDA guidepost, we have included approximately $30 million of stranded costs associated with the CCS transaction in 2026. During 2026, a large majority of this stranded cost will be eliminated and drive our initiatives, and we expect the stranded costs to be minimal when we move into 2027. Within our guidepost, we expect low-teen adjusted EBITDA growth in Ruckus as we continue to invest in sales and go-to-market initiatives. Adjusted EBITDA growth in Ruckus will be partially offset by adjusted EBITDA pullback in Aurora as legacy business normalizes after an unusually strong 2025. If you recall, we started out the year with a net leverage ratio of 7.8 times.

Following the ODBN DAS transaction closing, we used those proceeds to pay down a portion of our debt. In January, we then announced the sale of the CCS segment in August 2025. During the year, all three segments successfully grew on both the top and bottom line. Vistance Networks, Inc., including CCS revenue, grew from $4.2 billion to $5.7 billion, an increase of 35%, and EBITDA grew from $700 million to $1.3 billion, an increase of 90%. We ended the year with a net leverage ratio, including CCS, of 4.8 times. It was a great year. And, again, I want to thank our employees, customers, and shareholders for their support in 2025.

I am excited for 2026 as Vistance Networks, Inc. is positioned for another strong year. And with that, we will now open the line for questions.

Operator: As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. Our first question comes from Samik Chatterjee with JPMorgan. Your line is open.

Samik Chatterjee: Maybe if I can start on the memory sort of challenges that you firstly referenced in your prepared remarks. I just wanted to understand how confident you are about getting capacity as you work through 2026 at this point. Are you able to secure some of the capacity that you need? And how much of an EBITDA impact are you embedding from that in your 2026 guide? And then I have a follow-up. Thank you.

Kyle D. Lorentzen: Okay. Yes. Thanks, Samik, for the question. As discussed in our prepared remarks, like most companies, we are dealing with tight supply, but we are working very closely with our suppliers and customers on availability. We have orders that have been on the books with suppliers for more than a couple of years. In addition to availability, we are dealing with the memory chip price increases, and we are passing on most of the price to our customer base, but there is a little bit of lag in our ability to pass it on. I believe we are in a relatively good position on supply at this point. We have also looked at redesign options in both businesses.

We have successfully passed most of this cost onto our customers as a result of the memory chip price increases.

Samik Chatterjee: And any impact on EBITDA that you are factoring in? Or is it—

Kyle D. Lorentzen: We factored in about a $20 million impact as a result of the memory chip price increases.

Samik Chatterjee: Got it. Got it. Okay. And for my follow-up, I think you mentioned $2.6 billion of cash on hand. You would add some modest leverage before doing the special distribution. How should I think about minimum cash that you want on the balance sheet to run the business in the current revenue profile? And given that you have the proceeds now, is there anything that prevents you from accelerating the announcement of the special distribution before April?

Kyle D. Lorentzen: Yes. So from a cash perspective, think about it as a couple hundred million dollars of cash. That is probably conservative. I think we want to maintain the financial flexibility, maybe a little bit more cash on the balance sheet. So think about it as a couple hundred million, and then a little bit more cash on the balance sheet. On the distribution, we talked about what we are saying about the distribution in our prepared remarks. We expect the distribution to be at least $10 and the return of basis. So that is generally what we outlined regarding the distribution.

Operator: Thank you. Our next question comes from Tim Savageaux with Northland Capital Markets. Your line is open.

Timothy Paul Savageaux: Hi. Good morning. Question on the Aurora business. I am trying to get a sense of the outlook for the year. I know you talked about EBITDA declining. I imagine mix is a big part of that. On the top line, would you expect to be able to grow maybe a little bit on the top line given wins that you are talking about, especially in the U.S., and see that weakness reflected in margin decline and mix? Would you expect revenues to be down for the year in Aurora for 2026? Thanks.

Kyle D. Lorentzen: Yes. Hi, Tim. I think we expect the revenue to be up. What is dragging the EBITDA down a little bit in the Aurora business is, as you mentioned, mix. We had very strong legacy business revenue last year, which comes at a little bit higher margin than our DOCSIS 4.0. And then the other piece that is impacting the EBITDA, as we mentioned in the prepared remarks, is the stranded cost. So in 2026, we will have some stranded cost. Then as we go through the year, those stranded costs will be removed. By the time we get to 2027, the CCS stranded cost impact will be minimal.

But that will be a drag for us from an EBITDA perspective in 2026.

Charles L. Treadway: Just to give you a little color on the market overall, we are seeing a resurgence in the DOCSIS upgrade activity that started coming back. Comcast is moving forward with FDX at better-than-expected levels. In general, we are seeing this uptick across the board, and especially where we have a strong position in amplifiers. That should be positive for us.

Timothy Paul Savageaux: That was where my second question was heading. I guess you described a key DOCSIS 4.0 win beginning to ship in Q1 2026. Any way you can provide any color on the size of that opportunity or how meaningful that could be for the business in terms of that second Tier 1 MSO win in driving the amplifier shipments in particular to continued record levels?

Kyle D. Lorentzen: We are not going to give the precise number, but it is a meaningful dollar amount. It is tens of millions of dollars of opportunity that comes with that win.

Operator: Our next question comes from Amit Daryanani with Evercore. Your line is open.

Amit Daryanani: Thanks a lot. Good morning, everyone. Maybe the first question on my side, it looks like at a high level, EBITDA dollars will be flat year over year in 2026 versus 2025. But it sounds like Aurora margins are going to dip down, Ruckus should go up. Wondering if you look at a more steady-state scenario, what do you think the optimal or the target margins should be for Aurora and Ruckus? Is there a specific revenue run rate you need to get there, or would you get that through some of the internal cost reduction initiatives?

Kyle D. Lorentzen: Yes. I think the way to think about our guide really has to do with some of the things we talked about in the prepared remarks. We have our stranded costs, as we talked about, Aurora mix change. We also talked, and we have been talking about the last couple of quarters, some E&O reversals in 2025 that will not repeat. I think on the EBITDA side, as we look at both the businesses, what you see in Q4—those are the types of gross margins that we would expect moving forward.

As we grow our revenue, which we expect to do in both businesses, we should see some EBITDA percent improvement just based on fixed-cost leverage to drive EBITDA percentage improvement.

Amit Daryanani: I was really more wondering if there is a longer-term target from a margin basis on either of the segments that you can talk about? And then maybe just separately on Ruckus specifically, there seems to be a really good Wi-Fi 7 adoption cycle that seems to be inflecting higher. Just touch on what is the revenue growth you expect out of Ruckus in calendar 2026, and the competitive narrative you are seeing there against Cisco and HPE, Juniper, and everyone else in that space as well? Thank you.

Kyle D. Lorentzen: Yes. So I think on the Ruckus side of the business, we expect growth faster than the market. We think the market is going to grow plus or minus 10%. Particularly the access point market is growing a little bit faster than the switch market. As we mentioned on the call, we believe there is strong market growth, but also with the sales investments we are making in the Ruckus business, we would expect to be able to grow faster than the market. We think we can grow revenue next year in the mid-teens level. Relative to margin profile, on EBITDA margins, think about Aurora at 20% adjusted EBITDA margins.

If we are able to leverage some of our fixed costs, we think the Ruckus business we can manage into the low-20s on an EBITDA margin basis.

Operator: Hi, guys. It is Brenden on for George. Wanted to get a sense of the customer concentration that is left in the overall Aurora Networks business. Is there anything that you can share about that? Just trying to get a sense for gross margins since you are investing in the business, and we are seeing that impact some of the adjusted EBITDA margins. Thanks.

Kyle D. Lorentzen: Yes. So on the second part of your question, the E&O benefit was about a $25 million impact favorably on our gross margins. On an EBITDA basis, that was partially offset by higher incentive compensation that we paid just because we had a strong year. Net-net, the EBITDA impact that we got between the E&O and the higher incentive comp is about a $10 million favorable impact. On customer concentration, for Vistance Networks, Inc., our top three customers represent about 40% to 45% of the business. The businesses are very different. Aurora has high customer concentration. Ruckus does not. Presentation-wise, incentive compensation sits below the gross margin line in the P&L.

Operator: Thank you. I am showing no further questions at this time. I would now like to turn it back to Charles L. Treadway for closing remarks.

Charles L. Treadway: Thank you for your time today, and we appreciate your interest in our company. We would like you to have a great rest of your week. Thank you.

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

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