Good day, and thank you for being here. Welcome to CommScope's Third Quarter 2025 Earnings Conference Call. Please note that today’s conference is being recorded. I will now turn the call over to your speaker, Massimo Disabato, Vice President of Investor Relations. Please proceed.

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

Thank you, Massimo. Good morning, everyone. I'll begin on Slide 2. I'm pleased to announce in the third quarter, CommScope delivered net sales of $1.63 billion, a year-over-year increase of 51% and adjusted EBITDA of $402 million, a year-over-year increase of 97%. These very positive results were generated by strong performance in all of our segments. The third quarter also marked the sixth consecutive quarter that we sequentially improved adjusted EBITDA. The adjusted EBITDA as a percentage of revenue of 24.7% was a record for CommScope since the ARRIS acquisition, reaffirming our strategy of managing what we can control and maximizing on favorable market conditions. Our RemainCo business comprised of ANS and RUCKUS delivered net sales of $516 million in the third quarter, which was 49% above the prior year and delivered $91 million of adjusted EBITDA in the quarter, an increase of 95% versus the third quarter of 2024. RemainCo adjusted EBITDA as a percentage of sales was 17.5%, 400 basis points above the prior year. These businesses continue to benefit from the upgrade cycles as well as new product introductions. In addition to our strong EBITDA performance, we ended the quarter with $705 million of cash, an increase of $134 million in the quarter. This further strengthens our liquidity position, and we expect to generate incremental cash in the fourth quarter. With that, now I'd like to give you an update on each of our businesses, starting with the 2 businesses that will make up RemainCo, ANS and RUCKUS. Starting with ANS. Net sales of $338 million were up 77% in the third quarter compared to the prior year, and adjusted EBITDA was up 169%. These increases were primarily driven by our continued deployment of our new DOCSIS 4.0 amplifier and node products. Our FDX amplifier deployment with Comcast continues to go well, and this is reflected in our results. As stated before, we believe ANS is well positioned with decades of knowledge of our customers' ecosystems and our breadth of new products for service providers to take advantage of the latest DOCSIS upgrade cycle as well as evolving their legacy DOCSIS 3.1 networks. Our product range includes all areas of the HFC network, including DOCSIS 3.1, 3.1E and DOCSIS 4.0 solutions. During the third quarter, we announced that CommScope achieved record-breaking speeds at the CableLabs DOCSIS 4.0 at DAA Technology Interop event. Powered by CommScope's Evo virtual CCAP platform, the team achieved unprecedented speeds of 16.25 gigabits per second in the downstream across 2 load balance DOCSIS 4.0 modems for multiple manufacturers using various chipsets. In related tests, the CommScope team also achieved downstream speeds of over 9.4 gigabits per second on a single DOCSIS 4.0 modem. These breakthroughs show that a DOCSIS 4.0 network can compete with the fiber-to-the-home speeds. Additionally, over the last quarter, we found traction with our newly released PON portfolio at a major North American service provider, which will deliver multi-gigabit bandwidth and scalable options for growth. We also deployed our virtual broadband network gateway solution with a major MSO. The vBNG solution is a software-based service that serves as a virtualized alternative to traditional gateways. vBNGs provide scalable, agile, and cost-effective broadband services. They help manage subscriber sessions, advanced routing, and flexible deployment in various architectures like cloud-native and container-based networks for HFC, PON, and mobile networks. At the SCTE Tech Expo last month, we showcased our entire suite of products and solutions that help customers upgrade their networks in the most agile ways possible. On display were DOCSIS 4.0 and unified solutions, including the RPDs and smart amplifiers. Coming out of the show, there seems to be some resurgence of excitement for DOCSIS 4.0 and DOCSIS 3.1E. In addition, during the show, we jointly announced with Comcast that the CommScope DOCSIS 4.0 FDX amplifiers feature an AI-driven management core, which auto detects and corrects network events in real time to deliver superior intelligence, performance, and reliability across Comcast's access network. CommScope has long been a world leader in network amplifiers with nearly 10 million shipped since the exception of DOCSIS 1.0 in 1997. In 2026, CommScope plans to introduce amplifiers and remote PHY devices that deliver DOCSIS 4.0 unified operation, supporting both the 1.8 gigahertz extended spectrum DOCSIS and FDX networks with a single device. As we have stated in the past, we are the only solution provider offering the full DOCSIS 4.0 access technology ecosystem, including nodes, DAA modules and amplifiers. CommScope is uniquely positioned to support any operator's path to 10G services. We continue to move forward with our new unified products that are now in the lab testing phase and expected to be available in the first half of 2026. We are pleased with the direction that ANS is headed. As the market shifts towards DOCSIS 4.0, we have positioned our product portfolio to take advantage of many upgrade paths. The new products position ANS to maintain performance as the market shifts away from some of our legacy products. Turning to RUCKUS. Revenue was up 15% in the third quarter compared to the prior year. RUCKUS adjusted EBITDA of $36 million was up $10 million or 38% versus Q3 of 2024. In the third quarter, we saw continued strong demand for RUCKUS driven by our Wi-Fi 7 products and subscription services as well as our go-to-market initiatives. During the quarter, we deployed our first T670 outdoor Wi-Fi access points for large private venues. It is a high-density AI-driven Wi-Fi 7 outdoor access point with a unique programmable directional antenna. We received U.S. federal government certification for our ICX 8200 as one of the first companies to achieve the new FIPS 140-3 certification across our ICX product line, enabling sales to U.S. federal customers. RUCKUS switches are designed to handle next-generation wireless and IoT networks, delivering exceptional and reliable performance. Also at the SCTE Tech Expo, we demonstrated our mobile data offload product. This provides MSOs and their mobile customers with higher data speeds, better reliability, seamless roaming, and lower data cost to the operator. Enabled with our cloud-based RUCKUS AI, it delivers unmatched network visibility, analytics, and troubleshooting to ensure exceptional customer experience. Utilizing our high-density T670 access point, we provide the required reliability and high throughput that is necessary for mobile data offload. This solution is focused on improving data flow, reducing latency, and increasing gross data offload tonnage. Customers have expressed interest in this technology, and we expect this to scale in 2026. With the strong year-over-year improvements in the pipeline of innovations, we feel that the challenges in 2024 with channel inventory are now well behind us. We continue to benefit from new products and our vertical market strategies. 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 managed service providers accelerate time to market and reduce operational costs. This fundamentally changes the deployment economics and delivers faster returns on investment. On top of the strong growth in 2025, RUCKUS is well positioned for strong growth in 2026, driven by our Wi-Fi 7 product offering, growing demand, and our strategic go-to-market investments. Despite the announced transaction, I will give a brief update on CCS. In the third quarter, CCS revenue was $1.1 billion, an increase of 51% year-over-year. CCS adjusted EBITDA of $312 million or an increase of 79% as a result of revenue growth, mix, and cost leverage. The CCS segment will continue to be a strong cash flow generator until the close of the transaction. Based on current views, we're raising our full-year CommScope adjusted EBITDA guidance to $1.30 billion to $1.35 billion. I want to give you an update on the divestiture of our CCS businesses to Amphenol. The sale of the CCS business was approved by our shareholders on October 16. Based on current progress, we now expect the sale to close in the first quarter of 2026. The transaction will allow us to return significant capital to our shareholders and immediately improves our leverage situation. The CCS business has found a great home with Amphenol, and we look forward to working with them to close the transaction. RemainCo will consist of the ANS and RUCKUS segments. Both of these businesses are recovering from challenging market conditions over the last 2 years. However, they have seen strong recovery in 2025. Based on the third quarter strength and Q4 visibility, we now expect RemainCo to deliver between $350 million and $375 million of adjusted EBITDA in 2025. As we service our customers, we have the right products, solutions, and scale to win new business. We will continue to focus on what we can control with a strategic focus on supporting our customers, innovating for the demands of future advanced networks, and increasing equity value. And with that, I'd like to turn things over to Kyle to talk more about our third quarter results.

Thank you, Chuck, and good morning, everyone. I'll start with an overview of our third quarter results on Slide 3. For CommScope, we reported adjusted EBITDA of $402 million for the third quarter of 2025, which increased 97% from prior year. Third quarter adjusted EBITDA results were up 19% sequentially versus the second quarter of 2025. Our adjusted EBITDA as a percentage of revenues was 24.7%, the best we have seen since the ARRIS acquisition and increased by 580 basis points year-over-year and 40 basis points versus the second quarter of 2025. For the third quarter, CommScope reported net sales of $1.63 billion, an increase of 51% from the prior year, driven by an increase in all segments. Adjusted EPS was $0.62 per share versus a loss of $0.06 per share in the third quarter of 2024. Order rates were down 8% sequentially in the third quarter of 2025, driven by seasonality and project timing. CommScope backlog ended the quarter at $1.32 billion, down $110 million or 8% versus the end of the second quarter 2025. With our CCS transaction announcement, I would like to separately discuss the strong performance of our two businesses that will make up RemainCo, ANS and RUCKUS. Third quarter revenue in these two businesses was $516 million, up 49% year-over-year. The stronger revenue resulted in adjusted EBITDA in the RemainCo businesses of $91 million, up 95% versus prior year. We are pleased with the RemainCo third quarter results as they came in above our forecast. Turning now to our third quarter segment highlights on Slide 4. Starting with our ANS segment. Net sales of $338 million increased 77% from the prior year as customer inventory levels stabilized and shipments of our DOCSIS 4.0 products have increased. ANS adjusted EBITDA of $54 million was up $34 million or 169% from the prior year, driven by higher revenue. ANS had a very challenging 2024 as customers continued to delay their upgrade cycle and the legacy business continued to decline. In the fourth quarter, we expect revenue to decrease due to project timing. However, we expect adjusted EBITDA to increase slightly. As we have discussed in the past, ANS is a project-driven business with timing of projects driving some volatility in results, both from a revenue and EBITDA perspective. We experienced a strong rebound in revenue and adjusted EBITDA year-to-date as our investments made over the last 3 years on product development have positioned us for the pending upgrade cycle. The business remains well positioned to take advantage of upgrade cycles while offsetting declines in the legacy business. RUCKUS net sales of $179 million increased by 15% versus the third quarter of 2024, driven by normalized inventory in the channel and stronger market demand as well as our go-to-market initiatives. RUCKUS adjusted EBITDA of $36 million increased 38% from the prior year, driven by the increases in revenue and favorable onetime items in the quarter of approximately $3 million, offset by investment in go-to-market. We continue to see strong market conditions driven by the Wi-Fi 7 upgrade cycle. We expect the strong market conditions to remain in 2026. As noted in previous calls, the overhang from channel inventory lasted through the first half of 2024. We are now seeing the benefits of normalized inventory in the channel as well as growing market demand. We continue to drive our go-to-market strategies and RUCKUS new product initiatives. In addition, we are beginning to see the impact of adding incremental selling resources. However, the net benefit of these new resources will not be realized until 2026. With the additional selling resources, new products, and vertical market focus, we are well positioned to grow as we move into 2026. Fourth quarter adjusted EBITDA is expected to decline compared to third quarter results due to the elimination of onetime benefits in the third quarter and seasonality. Finishing with CCS, as Chuck mentioned, net sales of $1.1 billion increased 51% from the prior year. CCS adjusted EBITDA of $312 million increased 79% from the prior year. CCS adjusted EBITDA as a percentage of revenue for the quarter remained strong at 28%, driven by favorable mix and cost leverage. The business continues to perform well, and we look forward to continuing to generate strong cash flow ahead of the sale to Amphenol. Turning to Slide 5 for an update on cash flow. During the quarter, we generated cash flow from operations of $151 million and free cash flow of $135 million. Due to strong results and updated adjusted EBITDA guidepost, we now expect cash to be up approximately $250 million from where we started the year. In this guidance, we still project an investment in working capital and capital expenditures of over $200 million, driven by growth in the business. Turning to Slide 6 for an update on our liquidity and capital structure. During the quarter, our cash and liquidity remained strong. We ended the quarter with $705 million in global cash and total available cash and liquidity of $1.28 billion. During the quarter, our cash balance increased by $134 million. In the quarter, we purchased no debt or equity on the open market. However, going forward, we may continue to use cash opportunistically to buy back debt and equity. The company ended the quarter with a net leverage ratio of 5.5x. I will conclude my prepared remarks with some commentary around our expectations for the fourth quarter of 2025. We will continue to focus on running the businesses and delivering results while preparing for the closing of the CCS transaction in the first quarter of 2026. As Chuck mentioned earlier, this is a transformational transaction that creates shareholder value by strengthening the balance sheet. With expected net proceeds of approximately $10 billion, we expect to repay all of our existing debt and redeem our preferred equity. With our excess cash and modest new leverage on the remaining company, we plan to distribute the excess cash to our shareholders as a special dividend within 60 to 90 days of the transaction closing. The exact amount of the special dividend will be determined after closing by the Board. On the performance side, we have seen 6 quarters of sequential quarterly adjusted EBITDA improvement. During the third quarter of 2025, we have continued to see strong performance in all of our business segments. The ANS and RUCKUS segments continue to perform well with third quarter adjusted EBITDA of $91 million, up 95% over prior year. As a result of the continued strong results, we are raising our 2025 RemainCo adjusted EBITDA guidepost from $325 million to $350 million, up to $350 million to $375 million. The midpoint of this RemainCo guidance indicates a sequential adjusted EBITDA decline in the fourth quarter, driven by seasonality, particularly in the RUCKUS business. As for CommScope, we are raising our 2025 CommScope adjusted EBITDA guidepost from $1.15 billion to $1.2 billion, up to $1.3 billion to $1.35 billion. And with that, I'd like to give the floor back to Chuck for some closing remarks.

Thank you, Kyle. In closing, we have delivered another strong quarter driven by strong market conditions and our focus on internal initiatives. The CCS transaction is ahead of schedule and is now expected to close in the first quarter of 2026. This is a transformational transaction for CommScope that unlocks equity value, allows us to return significant cash to our shareholders and strengthens the businesses. Additionally, we are encouraged by both the performance and positioning of the RemainCo businesses, ANS and RUCKUS. Both businesses exceeded our projections in the quarter, and this performance demonstrates the strong positioning of RUCKUS and ANS. The deleveraging that comes with the CCS transaction positions these businesses for success, growth, and value creation. Finally, I would like to thank our team for strong execution. The hard work and dedication of our team with strong support of our equity holders, debt holders, customers, and suppliers has driven strong results and positioned all of our businesses for future success. And with that, we'll now open the line for questions.

Our first question comes from Simon Leopold with Raymond James.

First, could you help us understand the criteria the Board may consider regarding the special dividend? I know you can't quantify it, but any insight would be appreciated. Also, you provided some encouraging comments on the RUCKUS outlook for 2026, but I am less certain about your views on ANS trends for that year. You mentioned a potential sequential decline due to seasonal patterns, but I am curious about how that is shaping up.

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

To address your second question, Simon, we are witnessing a resurgence in DOCSIS upgrade activity. Comcast is progressing with FDX and is exceeding expectations. Overall, we anticipate a general increase in DOCSIS for 2026. As discussed in the call, 2025 showcased a strong rebound. Looking ahead, we expect modest growth in this business along with strong cash flow generation, primarily driven by new products, despite a decline in our legacy offerings. That sums up the situation.

Our next question comes from Samik Chatterjee with JPMorgan.

I have a couple. Maybe just on the DOCSIS upgrades and the record amplifier shipments that you're seeing. I know you talked about sort of customers coming in better than expected at this point. But how should we think about sort of where you are in the cycle? What visibility are customers giving you in terms of their upgrade plans into next year? Just trying to get sort of more bookends around like is this going to be a few quarters? Or do you see a longer cycle just because of also BEAD coming in to sort of support this in 2026? How should we think about that, if you can help? And I have a follow-up.

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

Okay, great. Just to follow up on that, did you expect ANS to moderate a bit during the quarter? Was the upside surprise you saw mainly due to overall amplifier shipments, or was there also a software pull-in contributing to the increase?

Yes. I think in the quarter, there was no real software impact in the quarter. I think we had indicated on a sequential basis that the ANS business was going to be down on an EBITDA basis, driven by a really, really strong second quarter that we had that was impacted by the software. So as we went into Q3, it was more of a hardware mix for us that drove the sequential decline, albeit still a pretty solid quarter for ANS.

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

Yes, we've indicated that the RemainCo EBITDA guidance for 2025 is expected to be between $350 million and $375 million. When considering the RemainCo businesses, working capital and taxes should be quite standard. We anticipate seeing an increase in cash flow compared to the overall CommScope primarily in capital expenditures, as these businesses typically require less capital than the CCS business. To arrive at the actual cash flow figure, as mentioned in our prepared remarks and the proxy, any leverage we apply to the business will certainly affect the cash flow, which will be clarified once the CCS transaction and its associated leverage are finalized.

Our next question comes from Kevin Niederpruem with Bank of America.

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

Sure, sure. I would say our inventory issues are behind us at this point. I mean, as you see that the Q3 revenue was up 15% year-over-year. What's really driving all this are our new products and solutions. I think we're gaining traction with our RUCKUS ONE product line. And I'd say that includes the subscriptions. We are seeing a Wi-Fi refresh, and I would say we're in the early innings of that. And I would say, in general, strong market conditions, specifically for access points. And the other thing that's going on in our business is we're investing approximately $20 million a year in incremental sales resources, and we started that this year. These resources, combined with our new products, our vertical market initiatives, focus on RUCKUS ONE subscriptions, and I would say some channel initiatives are going to support revenue growth. And I believe it's going to be like a 2x market growth rate over the next several years.

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

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

Got it. And then my last question is more broad-based around competition. Can you parse out for us the competition and more of the players that you're seeing in both the ANS side and the RUCKUS side?

Well, I'd say on the ANS side, I mean, there's a wide range of, let's say, smaller players or niche players. I think you think about like a Telista, you think about a Vecima, when you think about the larger players, more larger than those guys, you think about Harmonics and then you got ATX. Those would be the players in that space. And what was your other question?

Is the competition on RUCKUS.

Yes. I mean that would be Cisco, HP, Juniper, Extreme. That would be the ones I'd call out Arista.

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

Our next question comes from George Notter with Wolfe Research.

This is Brenden on for George. I wanted to ask a question about the 2025 EBITDA guide. It looks like you guys raised the guidance for the core RemainCo business, but any color on what you expect for CCS to do next quarter? I think some of the guidance raised in the RemainCo was maybe offset by CCS possibly. Anything there would be awesome.

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

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

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

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