Good day, and thank you for standing by. Welcome to the CommScope Second Quarter 2025 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Massimo Disabato, Vice President, Investor Relations.

Good afternoon, and thank you for joining us today to discuss the recently announced CCS transaction and CommScope's 2025 Second Quarter Results. I'm Massimo Disabato, Vice President of Investor Relations for CommScope, and with me on today's call are Chuck Treadway, President and CEO; and Kyle Lorentzen, Executive Vice President and CFO. You can find the slides that accompany this report on our Investor Relations website. Please note that some of our comments today will contain forward-looking statements based on our current view of our business, and actual future results may differ materially. Please see our recent SEC filings which identify the principal risks and uncertainties that could affect future performance. Before I turn the call over to Chuck, I have a few housekeeping items to review. Today, we will discuss certain adjusted or non-GAAP financial measures which are described in more detail in this morning's earnings materials. Reconciliation of non-GAAP financial measures and other associated disclosures are contained in our earnings materials and posted on our website. All references during today's discussion will be to our adjusted results. All quarterly growth rates described during today's presentation are on a year-over-year basis, unless otherwise noted. I'll now turn the call over to our President and CEO, Chuck Treadway.

Thank you, Massimo. Good afternoon, everyone. I'll begin on Slide 2. This morning, we announced that we entered into a definitive agreement to sell our CCS business to Amphenol for $10.5 billion in an all-cash transaction. The deal is subject to customary closing conditions, including receipt of applicable regulatory and shareholder approval. We would expect the deal to close in the first half of 2026. Amphenol is a strong buyer of the CCS assets. Our customers and our employees going with this transaction will be in very good hands. I'm excited to announce this transformational deal that unlocks equity value, returns cash to our shareholders and strengthens the business. Our equity price was not reflective of the true value of our company. This transaction now brings improved clarity to CommScope equity value. The company expects net proceeds after taxes and transaction expenses to be approximately $10 billion. After repaying all of our debt, redeeming our preferred equity and adding modest leverage on the remaining company, we would expect to have significant excess cash. We expect to distribute this excess cash to our shareholders as a dividend within 60 to 90 days following the closing of the proposed transaction after taking into account all relevant factors. The exact amount and timing of the dividend will be determined by the company after closing. I'd like to personally thank our shareholders, debt holders, customers, suppliers and employees as we have navigated through challenging market conditions and leverage uncertainty. We really appreciate your patience. I'm excited for the future of the remaining ANS and RUCKUS businesses. They have been a bit slower to recover than the CCS business. However, both of these businesses have had very strong second quarters and are poised for continued strong performance and growth. The second quarter 2025 LTM adjusted EBITDA for these businesses is $300 million. RemainCo is well positioned to deliver year-over-year growth in 2025 with strong cash flow generation. As we move through the second half of the year, we will provide updates on the pending transaction and positioning of RemainCo as appropriate. Now on to our second quarter results on Slide 4. In the second quarter, CommScope delivered net sales of $1.388 billion, a year-over-year increase of 32% and adjusted EBITDA of $338 million, a year-over-year increase of 79%. These very positive results were attributed to strong performance in all of our segments. The second quarter also marked the fifth consecutive quarter that we sequentially improved adjusted EBITDA. The adjusted EBITDA as a percentage of revenues grew from the first quarter to 24.3%, reaffirming our strategy of managing what we can control as we continue to deliver results in line with our strategy. We saw a particular strength in ANS and RUCKUS in the second quarter, with these two segments contributing revenues of $513 million, 58% above prior year. ANS and RUCKUS delivered $127 million of adjusted EBITDA in the quarter, an increase of 326% versus the second quarter of 2024 and 101% sequentially. RemainCo adjusted EBITDA as a percentage of sales was 24.7%, 156% above prior year. These businesses continue to benefit from the upgrade cycles and new product introductions. As an update from our last earnings call, we have been closely monitoring the implementation of tariffs and the fluidity of the situation. During the second quarter, we have developed and implemented our plan to mitigate the effect of current direct and indirect tariffs. Going forward, if tariffs remain at current levels, we feel that the net impact of tariffs on our financial results will be minimal. Our strategy is to continue to leverage our flexible global manufacturing footprint, our broad supplier base, and commercial strategies to effectively mitigate the impact. In addition, essentially all of our products produced in Mexico comply with USMCA guidelines, reducing our overall exposure to tariffs. As you're aware, the situation remains very fluid. We will continue to monitor, mitigate and update as required. With that, I'd now like to give you an update on each of our businesses starting with the two businesses that will make up RemainCo, ANS and RUCKUS. Starting with ANS. Net sales of $322 million was up 65% in the second quarter compared to the prior year and adjusted EBITDA was up 132%, primarily driven by a record deployment of our new DOCSIS 4.0 amplifier and node products as well as higher license sales. Our DOCSIS 4.0 amplifier business has increased dramatically in both FDX and ESD. Our FDX amplifier deployment with Comcast has gone well, and this is reflected in our results. In addition, our ESD amplifier sales have increased as we have won businesses with several customers, including Charter. As stated below, we believe ANS is well positioned with decades of knowledge of our customers' ecosystems, and our breadth of new products for service providers to take advantage of the latest DOCSIS upgrade cycle as well as evolving their legacy DOCSIS 3.1 networks. Our product range includes all areas of the HFC network, including DOCSIS 3.1, 3.1E and DOCSIS 4.0 solutions. Over the last quarter, we have had several key wins for our virtual CMTS which integrates technology from our previous Casa acquisition and we expect this trend to continue. We have also moved forward with our new unified products as they are now in lab testing phase and are expected to be available by the end of this year and into next year as we release additional products. These positive results reflect our strategy shift to partnering directly with major MSOs to develop key products for them versus a one-size-fits-all strategy. This provides a closer relationship with our customers while solving for their unique needs together. We are extremely pleased with the direction that ANS is headed and the results are proof that our strategy is paying off. Although we would expect the rest of the year to remain strong in terms of revenue, we do not expect the second half EBITDA to remain at this level due to product mix and project timing. As we have discussed in the past, ANS will be more cyclical than our other businesses due to the project nature of the business and license sales. The second quarter was a particularly strong quarter as we were favorably impacted by the FDX ramp and higher-than-normal license sales. Turning to RUCKUS. Revenue was up 47% in the second quarter compared to the prior year. RUCKUS adjusted EBITDA was up $51 million versus Q2 of 2024. In the second quarter, we saw continued improved demand for RUCKUS driven by our new Wi-Fi 7 products and subscription services as well as our vertical market strategy taking shape. We launched our suite of next-generation AI-driven Wi-Fi 7 solutions tailored for the hospitality industry. Our products are powered by agentic AI within our AI-driven cloud-native RUCKUS One platform. Earlier in Q1, we unveiled a new wave of AI-driven enterprise networking solutions featuring GenAI, edge AI and intent-based AI. With our strong year-over-year improvements we feel that challenges in 2024 with channel inventory are now well behind us. We believe the RUCKUS business is well positioned for strong growth in 2025 driven by normalized channel inventory and growing demand. We continue to benefit from new products and our vertical market strategy taking shape. In addition, we are beginning to see the impact of adding incremental selling resources as indicated by our increase in sales funnel opportunities. We have also seen additional traction in the North American service provider market as more customers are interested in our RUCKUS One MDU solutions. These solutions take advantage of our RUCKUS One platform and help manage service providers accelerate time to market and reduce operational costs. This fundamentally changes the deployment economics and delivers faster return on investment. We continue to be encouraged by the RUCKUS business as this breakout quarter gives us confidence for our projected growth for the near term. Despite the announced transaction, I will give you a brief update on CCS. In the second quarter, CCS revenue grew 20% year-over-year while CCS' adjusted EBITDA increased 23% and as a result of revenue growth, mix and cost leverage. CCS adjusted EBITDA as a percentage of revenue was 24.1%. Again, I would like to call out our enterprise fiber business that includes our products that we sell into the data center market. For the second quarter, the enterprise fiber business continued to generate substantial growth with year-over-year revenue up 85%. The CCS segment will continue to be a strong cash flow generator between sign and close of this transaction. Based on current views, we are raising our full-year CommScope adjusted EBITDA guidance to $1.15 billion to $1.2 billion. Overall, we are excited about the announced CCS transaction. This transaction returned significant capital to our shareholders versus the current equity price and immediately solves our leverage situation. The CCS business has found a great home with Amphenol, and we look forward to working with them to close the transaction. RemainCo will consist of the ANS and RUCKUS segments and is well positioned to grow and create value. Both of these businesses are recovering from challenging market conditions over the last two years. However, the strong second quarter results show the potential of these businesses. Overall, we expect RemainCo, ANS and RUCKUS to deliver between $325 million to $350 million of adjusted EBITDA in 2025. As we have discussed in previous communications, we will continue to focus on our strategy of focusing on what we can control. As we service our customers, we have the right products, solutions, and scale to grow and win new business. We will continue to focus our strategy on what we can control, including supporting our customers and innovating for the ever-increasing demands of future advanced networks. And with that, I'd like to turn things over to Kyle to talk more about our second quarter results.

Thank you, Chuck, and good afternoon, everyone. I'll start with an overview of our second quarter results on Slide 4. For CommScope, we reported adjusted EBITDA of $338 million for the second quarter of 2025, which increased 79% from the prior year. Second quarter adjusted EBITDA results were up 41% sequentially versus the first quarter of 2025. Our adjusted EBITDA as a percentage of revenues was 24.3%, the best we have seen since the ARRIS acquisition and increased by 640 basis points year-over-year and 270 basis points versus the first quarter of 2025. For the second quarter, CommScope reported net sales of $1.388 billion, an increase of 32% from the prior year, driven by an increase in all segments. Adjusted EPS was $0.44 per share versus $0.03 per share in the second quarter of 2024. Order rates were up 26% sequentially in the second quarter of 2025, reflecting the stronger demand and positioning us well for the third quarter. CommScope backlog ended the quarter at $1.431 billion, up $265 million or 23% versus the end of the first quarter of 2025. With our CCS transaction announcement, I would like to separately discuss the strong performance of our two businesses that will make up RemainCo, ANS and RUCKUS. Second quarter revenue in these two businesses was $513 million, up 58% year-over-year and 32% sequentially, the stronger revenue resulted in adjusted EBITDA in the RemainCo businesses of $127 million, up 326% versus prior year and 101% sequentially. Turning now to our second quarter segment highlights on Slide 5. Starting with our ANS segment. Net sales of $322 million increased 65% from the prior year as customer inventory levels stabilized and shipments of our DOCSIS 4.0 products have increased. ANS adjusted EBITDA of $80 million was up $45 million or 132% from the prior year, driven by higher revenue, including licenses and project timing. ANS had a very challenging 2024 as customers continue to delay their upgrade cycle and the legacy business continued to decline. In the third quarter, we do not expect revenue and EBITDA to remain at these levels. As we have discussed in the past, ANS is a project-driven business with timing of projects and licenses driving some volatility in results. We have experienced a strong rebound in revenue and adjusted EBITDA in the first half of the year as our investments made over the last three years on product development have positioned us for the pending upgrade cycle. Despite the optimism for 2025, we are still in early phases of the DOCSIS 4.0 upgrade cycle as customers continue to evaluate the path and timing of upgrades. The business remains well positioned to take advantage of upgrade cycles as we have decades of experience with customer ecosystems, the largest installed base and the broadest suite of products. RUCKUS net sales of $190 million increased by 47% versus the second quarter of 2024, and driven by normalized inventory in the channel and stronger market demand as well as our vertical market strategy. RUCKUS adjusted EBITDA of $46 million increased $51 million from the prior year, driven by the increases in revenue and a favorable one-time E&O in the quarter of approximately $10 million. As noted in previous calls, the overhang from channel inventory lasted through the first half of 2024 and started to improve in the third quarter. We are now seeing the benefits of normalized inventory in the channel as well as growing market demand. On a sequential basis, revenue increased 17% and adjusted EBITDA increased 87%. We continue to drive our vertical market strategies and RUCKUS new product initiatives, including RUCKUS Edge. In addition, as Chuck mentioned before, we are beginning to see the impact of adding incremental selling resources. With the additional selling resources, new products and vertical market focus, we are well positioned to take market share in the medium and long term. As the additional selling resources begin to make an impact over the next few quarters, we would expect to see improving benefits in 2026. Third quarter RUCKUS revenue and adjusted EBITDA are expected to decline compared to second quarter results due to seasonality and the elimination of the second quarter inventory adjustment benefit. Finishing with CCS, net sales of $875 million increased 20% from the prior year. CCS adjusted EBITDA of $211 million increased 23% from the prior year. CCS adjusted EBITDA as a percentage of revenue for the quarter remained strong at 24.1%, driven by favorable mix and cost leverage. The CCS revenue increase was across most of the product lines with hyperscale and cloud data centers seeing the strongest growth at 85%. Turning to Slide 6 for an update on cash flow. During the quarter, we generated cash flow from operations of $77 million and free cash flow of $64 million, due to strong results and updated EBITDA guideposts, we now expect cash to be up approximately $125 million from where we started the year. In this guidance, we still project an investment in working capital and capital expenditures of over $200 million driven by growth in the business. Turning to Slide 7 for an update on our liquidity and capital structure. During the second quarter, our cash and liquidity remained strong. We ended the quarter with $571 million in global cash and total available cash and liquidity of $991 million. During the quarter, our cash balance increased by $78 million. We purchased no debt or equity on the open market. However, going forward, we will continue to use cash opportunistically to buy back debt and equity. The company ended the quarter with a net leverage ratio of 6.6x. I will conclude my prepared remarks with some commentary around our expectations for the second half of 2025. Clearly, we will be focusing on running the business and delivering results while preparing for the recently announced closing of the CCS transaction in the first half of 2026. As Chuck mentioned earlier, this is a transformational transaction that creates shareholder value while strengthening the balance sheet. With the net proceeds of approximately $10 million, we expect to repay all of our debt and redeem our preferred equity. With our excess cash and modest leverage on the remaining company, we plan to distribute the excess cash to our shareholders as a dividend within 60 to 90 days of the transaction closing. The exact amount of the dividend will be determined after closing. On the performance side, we have seen five quarters of sequential quarterly adjusted EBITDA improvement. During the second quarter of 2025, we have continued to see strong performance in all of our business segments. The ANS and RUCKUS segments have rebounded from the challenges in 2024 and are well positioned. This is evidenced by improvement in the first half of 2025 in these businesses. We expect RemainCo adjusted EBITDA to be between $325 million and $350 million for 2025. Our second half RemainCo adjusted EBITDA will be down from the first half, driven by some of the one-time items we realized in the second quarter and project timing in ANS. Also, we are raising our 2025 CommScope adjusted EBITDA guidepost from $1 billion to $1.05 billion to $1.15 billion to $1.2 billion. Based on the market recovery and focusing on what we can control, including managing cost and supporting our customers, our RemainCo adjusted EBITDA as a percent of revenue was very strong at 24.7% in the second quarter. This is a testament to our priority to control what we can and improve long-term profitability. And with that, I'd like to give the floor back to Chuck for some closing remarks.

Thank you, Kyle. In closing, we are very excited about the CCS transaction. It is a transformational deal that unlocks equity value, returns cash to our shareholders and strengthens the businesses. Our shareholders, customers, employees and other stakeholders should be very pleased with this outcome. Additionally, we are encouraged by the performance and positioning of ANS and RUCKUS. On the RemainCo business, the second quarter performance demonstrates the strong positioning of Ruckus and ANS. Finally, I would like to thank our team for strong execution. The hard work and dedication of our team with the strong support of our equity holders, debt holders, customers and suppliers has driven strong results and positioned all of our businesses for future success. And with that, we'll now open the line for questions.

Our first question comes from Meta Marshall with Morgan Stanley.

Great. Congratulations on the deal. A couple of questions for me. One, just in terms of the RemainCo, whether these assets kind of make sense together? Or is this kind of the final step in the journey? Just any commentary there. And then just second question, just to get a sense of kind of what are the corporate overhead costs that we should think of kind of from on a go-forward basis of kind of the ANS and RUCKUS businesses together without CCS.

Can you hear me?

We can hear you now, but we didn't hear anything previously.

I'll start over. Thanks for the question, Meta. We are focused on operating our businesses and concluding the recently announced transaction. We are investing in both businesses, including new technology, capital, and additional resources. In my prepared remarks, I mentioned the positive developments for ANS and RUCKUS. We are enhancing new product development, such as RUCKUS One, the Wi-Fi 7 portfolio, and unified products, along with virtual CMTS wins at ANS. Over the past five years, we have worked hard to strengthen these businesses. I believe our strong results in the second quarter for both ANS and RUCKUS highlight the progress made over the last year. I'll conclude by saying that since I joined for our CommScope NEXT program, we continuously seek ways to enhance shareholder value while supporting our customers and employees, and we will maintain this strategy.

The second part of your question regarding corporate overhead costs. As part of the transaction, we will transfer a significant portion of our G&A team to Amphenol. Once we complete this transfer and establish the RemainCo, we anticipate that the G&A costs currently allocated to ANS and RUCKUS will accurately reflect what we envision for the future G&A organization for RemainCo.

Our next question comes from George Notter with Wolfe Research.

I was wondering what the capital expenditures and working capital requirements will be for the CCS business moving forward.

Yes, we're not going to provide any specifics on that. I mean we're required to continue to support the business. We'll continue to support the business and obviously get the cash flow that comes from that business between sign and close. We provided some guidance around our cash flow for 2025 in the prepared remarks. And all of those costs would be considered within that guidepost.

Got it. Okay. Super. And then I'm just curious about what the customer concentration looks like in RemainCo? I would imagine that Comcast and Charter are quite significant customers here. Could you give us a sense for what that might look like as a percentage of RemainCo sales?

Yes, we won't be providing specific details on that. However, as you can understand, the ANS business has higher concentration. In contrast, the RUCKUS business has the least amount of concentration among our three businesses. On a blended basis, ANS has significantly more concentration than RUCKUS. This is something we have been managing and will continue to manage going forward.

Our next question comes from Tim Savageaux with Northland Capital Markets.

Congratulations on the deal and the results. I was going to ask about concentration as well, but I'd like to delve a bit deeper into ANS. You mentioned the surge in DOCSIS 4.0 revenue. Looking at the business now, how much of it would you say is considered next-gen or growth business compared to legacy CMTS? Also, how does this translate into your perception of the growth rate? It seems that across both businesses, there should be potential for double-digit growth. I’m interested in your perspective on that.

Yes, we prefer not to dive into the details comparing new generation to the previous generation in ANS. However, we can share that in the first half of the year, the majority of our revenue is derived from next-gen products in ANS, while the revenue from our legacy technology and business is definitely below 50%. As we mentioned before, as the upgrade cycle picks up speed, we anticipate the legacy business will continue to decline, with next-gen products taking over that revenue.

One thing I'd add to that, we support our customers that have, let's say, existing technologies that they want to extend, so think about like doing more high splits and getting better down speeds and up speeds with new modems. So in some cases, it's existing technology with some different splits and then some modems, but they're going to be able to extend the life of their product portfolio. And I would say that's kind of like somewhere in the middle between new and existing but that just gives you a little more color on it.

Okay. And if I could follow up, did you guys want to sign up for double-digit growth for RemainCo going forward?

No, I think as we discussed in our prepared remarks, we're particularly monitoring the upgrade cycle in ANS. While it is gaining momentum, it hasn't yet fully picked up across our entire customer base. The ANS business will continue to experience cyclical patterns based on project timelines and product shipments. There are different profiles in the two businesses. We're not ready to provide guidance for 2026, but even for 2025, we indicated that the second half may be lower than the first half, mainly due to project timing and some of the license revenue we receive. So, we're not prepared to guide for 2026 at this time.

But in '25, if you think about the $325 million to $350 million, that's a significant improvement over 2024.

Okay. Congrats again.

Our next question comes from Simon Leopold with Raymond James.

I wanted to see if you could help us understand the breakout of free cash flow between RemainCo and the CCS segment within your forecast. Is that something you're able to split?

Yes, that's not something that we have. As I mentioned earlier, clearly, CCS is performing well, and it will be a contributor to our cash generation that we're going to see in the second half of the year.

And the other thing I wanted to see if you could comment on is, clearly, you have not had troubles with tariffs, and so that has not pressured your results. But I'm wondering if there's any possibility that it affected your customer behavior in whether or not you perceived or potential that there were pull forwards of customers buying ahead of any new tariff rules. Is that something you can discern, or do you have a comment on that?

Yes. Look, I would say that our customers understood and recognize that we have a flexible global manufacturing network in a very broad supplier base. And I would say most of our products in Mexico are being exempt under the USMCA exemption. And then we had a large percentage of all, we had a tariff exemption on the RUCKUS products as well. So I mean, those two cases, there might have been some pull in maybe in the RUCKUS side because they weren't sure about what this exemption was going to do. But so far, it looks like it's going to stay.

This concludes the question-and-answer session. I would now like to turn it back to Chuck Treadway for closing remarks.

Well, thank you for your time today, and I appreciate your interest in our company, and have a great rest of your week. Thank you.

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