CommScope's Q3 2025 Earnings Call: Contradictions on Special Dividend Criteria, ANS Legacy Decline, DOCSIS Upgrade Cycle, and ANS Revenue Mix

Date of Call: October 30, 2025

Financials Results

• Revenue: $1.63 billion, up 51% YOY
• EPS: Adjusted EPS $0.62 per share, versus a loss of $0.06 in Q3 2024

Guidance:

• RemainCo (ANS + RUCKUS) 2025 adjusted EBITDA expected to be $350M–$375M.
• CommScope 2025 adjusted EBITDA guide raised to $1.30B–$1.35B.
• CCS sale to Amphenol expected to close in Q1 2026.
• Expect ~ $10B net proceeds to repay debt, redeem preferred equity and fund a special dividend within 60–90 days post-close (board to determine amount).
• Q4 2025 adjusted EBITDA expected to decline sequentially due to seasonality and elimination of one-time benefits.
• Expect cash to be up ~ $250M from start of year.

Business Commentary:

* CommScope's Revenue and Profitability Growth: - CommScope reported net sales of $1.63 billion for Q3 2025, up 51% year-over-year, and adjusted EBITDA of $402 million, up 97% year-over-year. - The growth was driven by strong performance across all segments, strategic focus, and favorable market conditions.

• ANS Segment Performance:
• The ANS segment's net sales reached $338 million, up 77% year-over-year, with adjusted EBITDA increasing by 169%.

• This was primarily driven by the deployment of new DOCSIS 4.0 products, new product introductions, and strong operational execution.

• RUCKUS Segment Growth:

• RUCKUS reported net sales of $179 million, up 15% year-over-year, with adjusted EBITDA increasing by 38%.

• Growth was attributed to strong demand for Wi-Fi 7 products and subscription services, as well as strategic go-to-market initiatives.

• CCS Segment Performance:

• CCS segment's net sales were $1.1 billion, up 51% year-over-year, with adjusted EBITDA increasing by 79%.

• The growth was driven by revenue mix, cost leverage, and strong cash flow generation ahead of the planned sale to Amphenol.

• Financial Outlook and Divestiture:

• CommScope raised its full year adjusted EBITDA guidance to $1.30 billion to $1.35 billion, reflecting strong performance in RemainCo businesses.
• The divestiture of the CCS business to Amphenol is expected to close in Q1 2026, returning significant capital to shareholders and improving leverage.

Sentiment Analysis:

Overall Tone: Positive

• Management reported ‘‘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%’’. They raised 2025 RemainCo EBITDA to $350M–$375M and CommScope adjusted EBITDA to $1.30B–$1.35B, and expect the CCS sale to close in Q1 2026 with ~ $10B proceeds to strengthen the balance sheet.

Q&A:

• Question from Simon Leopold (Raymond James): Could you describe the criteria the Board will use to determine the special dividend? And how are you thinking about ANS trends specifically for 2026 given seasonal patterns?
  Response: Board will consider cash position at close and business performance to set any special dividend; ANS is in the early innings of a multiyear DOCSIS upgrade cycle — modest growth and strong cash flow driven by new products while legacy products decline.

• Question from Samik Chatterjee (JPMorgan): Where are you in the DOCSIS upgrade cycle and what visibility do customers give for next year? Was Q3 upside driven by amplifier shipments or software? And how should we think about RemainCo EBITDA versus normalized cash flow and CapEx?
  Response: DOCSIS is in very early innings of a multiyear upgrade; Q3 upside was hardware/amplifier-driven with no material software impact; RemainCo should be less CapEx‑intensive than CCS with normal working capital/taxes, and post‑transaction leverage will determine ultimate cash flow conversion.

• Question from Kevin Niederpruem (BofA): Can you explain where you view the Wi‑Fi 7 cycle today?
  Response: Inventory normalization is behind us; Wi‑Fi 7 refresh is in early innings, RUCKUS ONE and subscriptions gaining traction, and management expects revenue growth aided by ~$20M/year of incremental sales investment and ~2x market growth over several years.

• Question from Kevin Niederpruem (BofA): On ANS, beyond FDX smart amplifiers, how did CMTS, nodes, RPDs perform this quarter?
  Response: Nodes and RPDs, particularly FDX, are showing continued strength; legacy CMTS is declining; virtual CMTS is gaining traction with recent wins, especially in Europe.

• Question from Kevin Niederpruem (BofA): Who are your competitors across ANS and RUCKUS?
  Response: ANS competition is product-specific and includes smaller/niche vendors (Telista, Vecima) and larger players (Harmonics, ATX); RUCKUS competes mainly with Cisco, HP, Juniper, Extreme and Arista, depending on product and market segment.

• Question from Brenden Rogers (Wolfe Research): You raised RemainCo guidance — any color on what you expect for CCS EBITDA next quarter? Is CCS offsetting the RemainCo improvement?
  Response: CCS remains strong but Q4 is seasonally softer historically; CCS EBITDA is expected to be modestly down sequentially due to seasonality, not market weakness.

Contradiction Point 1

Special Dividend Criteria

It involves the criteria and process for determining the special dividend, which impacts shareholder expectations and strategic direction.

What criteria guide the Board's consideration of a special dividend? - Simon Leopold (Raymond James & Associates, Inc., Research Division)

2025Q3: The Board will consider all relevant factors at the CCS transaction's close to determine the dividend level. No specific criteria were mentioned. - Kyle Lorentzen(CFO)

Are RemainCo's assets cohesive, or is this the final step? - Meta Marshall (Morgan Stanley)

2025Q2: The CCS transaction is expected to be an accretive event for shareholders. We will then evaluate the best way to return cash to shareholders post-closing. However, we're not providing any specific time frame or how much of a dividend we would provide. - Kyle Lorentzen(CFO)

Contradiction Point 2

ANS Legacy Business Decline

It concerns the projected decline of the legacy business segment in ANS, which affects revenue forecasts and strategic focus.

How should we think about the DOCSIS upgrade cycle and customer upgrade plans for next year? - Samik Chatterjee (JPMorgan Chase & Co, Research Division)

2025Q3: ANS sees modest growth with strong cash flow, driven by new products and a decline in legacy products. - Charles Treadway(CEO)

Can you clarify the growth potential for ANS, particularly regarding DOCSIS 4.0 revenue, and the double-digit growth potential for RemainCo? - Tim Savageaux (Northland Capital Markets)

2025Q2: ANS's revenue is majority from next-gen products, with legacy business below 50%. As upgrade cycles progress, legacy business will decline, and next-gen will grow. - Kyle Lorentzen(CFO)

Contradiction Point 3

DOCSIS Upgrade Cycle and Market Outlook

It involves differing perspectives on the duration and market conditions surrounding the DOCSIS upgrade cycle, which impacts revenue expectations and strategic planning.

What’s the outlook for DOCSIS upgrades and customer adoption next year? Was the ANS upside driven by software or hardware? - Samik Chatterjee (JPMorgan Chase & Co, Research Division)

2025Q3: We're in the early innings of the DOCSIS upgrade cycle, expected to last several years. - Charles Treadway(CEO)

What's the split between hyperscale and traditional enterprise customers in your data center business? In the ANS business, what's the impact of amplifiers on the revenue mix? - Simon Leopold (Raymond James & Associates, Inc., Research Division)

2024Q4: We've seen a greater than anticipated level of DOCSIS upgrade activity, particularly on the Comcast side. - Chuck Treadway(CEO)

Contradiction Point 4

ANS Revenue Mix and Product Growth

It deals with the projected revenue mix and growth drivers in the ANS segment, which are crucial for understanding the company's financial performance and strategic focus.

What's your outlook on the Wi-Fi 7 cycle and key growth drivers? What were the ANS segment's results this quarter, especially in CMTS and nodes? - Kevin Niederpruem (BofA Securities, Research Division)

2025Q3: ANS saw continued strength in FDX nodes and RPDs, with the legacy CMTS declining. - Kyle Lorentzen(CFO)

Can you describe the rollout of FDX and unified amplifiers in 2025? - Priyanka Thapa (JPMorgan)

2024Q4: Amplifiers are a critical product, and we believe they will be a major driver of ANS revenue in 2025. - Chuck Treadway(CEO)