Good day, and thank you for standing by. Welcome to CommScope's Third Quarter 2025 Earnings Conference Call. [Operator Instructions] 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, VP, Investor Relations. Please go ahead.

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…

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 2 businesses that will make up RemainCo, ANS and RUCKUS. Third quarter revenue in these 2 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…

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 transactions 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.

[Operator Instructions] Our first question comes from Simon Leopold with Raymond James.

First, maybe hopefully, an easier one is, could you -- I understand you can't quantify the special dividend, but could you help us understand the criteria and how the Board may think about it? And then you did offer some, I think, encouraging comments on the RUCKUS outlook for '26. I was less clear how you're thinking about ANS trends specifically for '26. You did mention, I think, down sequentially on some seasonal patterns, but wondering about how that's setting 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.

And to answer your second part of your question, Simon, is, look, we're seeing some resurgence in DOCSIS upgrade activity. Comcast, as you know, is moving forward with FDX, and they're doing that at expected, I'd say, better-than-expected levels. And I'd say, overall, we're seeing a general uptick in DOCSIS for 2026. And as you -- as we talked about in the call, 2025 was a strong rebound. And we -- moving forward, we see this business with modest growth and strong cash flow generation. We see the growth coming from new products. And as you mentioned, it's a decline in our legacy products. I think that would be the way I'd size it up.

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. Okay. Great. And in relation to -- maybe just a follow-up on that, you did expect -- you had earlier outlined ANS to moderate a bit into the quarter. I mean the upside surprise that you saw was just overall amplifier shipments? Or was there a software pull-in as well along with it driving the upside?

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, which 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. I mean we -- obviously, we've provided some indication on what at least the '25 RemainCo EBITDA guidepost would be at the $350 million to $375 million. I think when we look at that -- look at the RemainCo businesses, I think working capital and sort of taxes are sort of -- would be sort of normal. I think the one place where we probably see a little bit of pickup from a cash flow basis versus the total CommScope would be in CapEx. These businesses tend to be less capital intensive than the CCS business. And then ultimately, to get to the actual cash flow number, as we've talked about in our prepared remarks and the proxy, whatever leverage we would put on the business would clearly have some impact on the cash flow, which will determine once we get to the CCS transaction and the leverage of that we'll put on the business.

[Operator Instructions] 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.