VISN

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 8:30 a.m. ET Vice President of Investor Relations - Jenny Thompson President and Chief Executive Officer - Chuck Treadway Executive Vice President and Chief Financial Officer - Kyle Lorentzen Operator: Good day, and thank you for standing by. Welcome to the Vistance Networks Second Quarter 2026 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, Jenny Thompson. Ma'am, please go ahead. Jenny Thompson: Good morning, and thank you for joining us today to discuss Vistance Networks 2026 Second Quarter Results. I'm Jenny Thompson, Vice President of Investor Relations for Vistance Networks. 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 the 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 our 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. Charles Treadway: Thank you, Jenny. Good morning, everyone. I'll begin on Slide 3. Before discussing our second quarter results, I'd like to discuss the recent Ruckus transaction. On July 1, 2026, we announced the closing of the previously announced sale of Ruckus to Belden for $1.846 billion. Net proceeds resulting from this transaction were approximately $1.75 billion. There was considerable interest in Ruckus over the years. We feel this transaction provides our shareholders with significant value being an all-cash transaction. We want to thank all of our Ruckus employees for their dedication in driving value in the Ruckus business and wish them continued success under Belden leadership. As a result of this transaction, this morning, we announced the Board of Directors has approved a special distribution of $5 per share. The special distribution will be paid by the end of August 2026. We expect that the special distribution will be treated as a return of capital for tax purposes. The cash associated with the special distribution will be supported by the proceeds from the Ruckus sale. In total, between the special distribution after both the CCS and Ruckus divestitures, we will have distributed $15 per share back to our shareholders while paying off all of our debt and redeeming all of our preferred equity. We are very pleased with this result as the sale of these 2 businesses have unlocked significant equity value. As we evaluated the amount of special distribution, we considered the cash on hand, expected cash flows as well as future investment opportunities and strategies. We would expect to end the year with between $700 million and $750 million of cash on the balance sheet. In addition, we expect a tax refund of approximately $160 million in the second half of 2027 as a result of our divestiture tax strategy. The strong cash balance and unlevered balance sheet allows us to evaluate investments, both organic and inorganic, including expanding outside of the cable market. In addition to business investments, we will evaluate stock buyback opportunities, including taking advantage of the $100 million buyback program the Board approved in the second quarter. As we continue to work on our go-forward strategy, we will provide updates as appropriate. Now that we've completed the Ruckus transaction, we will focus on growing Aurora, including taking advantage of the current DOCSIS 4.0 upgrade cycle that we believe will last for several years. We are well positioned in the amplifier space, which will be the largest segment of the market over the next few years. In addition to our focus on the DOCSIS 4.0 upgrade cycle, we are working closely with our customers on next-generation cable architecture. We will evaluate growth opportunities, including organic and inorganic investments. These investments could range from investing more aggressively in existing or new technology to evaluating potential acquisitions to broaden the markets we participate in, our technology portfolio and our customer base. As we evaluate acquisitions, we will be disciplined on valuations, including understanding long-term return opportunity. In addition to the core DOCSIS and DAA cable business, we are evaluating investments that allow us to participate in large markets outside cable in technology that we already own like PON, vBNG and security solutions. In PON, we have a commercial agreement with Altice Labs. This agreement allows us to bring best-of-breed technology, including providing a robust portfolio of PON solutions for next-generation fiber-to-the-home networks. Together, we can cover traditional GPON, XGS-PON and 50G-PON technologies, providing scalable ultra-high-speed broadband services while optimizing network density and energy efficiency. Our vBNG, or virtual Broadband Network Gateway, products were acquired as part of our Casa acquisition in 2024. Our vBNG is a cloud-native software solution that separates routing and subscriber management functions from physical hardware. It allows service providers to dynamically scale and control user planes on standard servers to manage multiple access networks such as fixed, wireless and fiber with low latency. One specific use case is mobile data offload, where using our virtualized system helps enable wireless gateways. In the second quarter, we signed an arm's length agreement with Ruckus to partner with them on specific mobile data offload products being sold to major U.S. wireless carriers. Finally, I would like to touch on our Security Solutions business that includes our PKI, or public key infrastructure, products. Our PKI products provide end-to-end device security, digital certificate provisioning and software licensing for IoT devices, smart networks and digital video systems. This is a business that we've been in for some time and have agreements with Motorola and Texas Instruments, among others. We have a unique broad offering that we feel has significant potential for investment and growth. The 3 examples above show the diversity of our business product offerings. In many cases, over the last few years, due to the need to focus on deleveraging and managing our balance sheet, we have not focused on these product lines and limited investment. Now that we have a strong balance sheet with substantial cash flow and available cash, we have the funds to make investments in these product lines. These investments may be organic or inorganic and may broaden our product portfolio through research and development funding or additional resources supporting go-to-market. Our Security Solutions business alone has the opportunity to create substantial value with investment in PKI as a Service and further product offerings. The Security Solutions business will allow us to diversify beyond our traditional cable markets at very attractive valuation multiples. I'm very excited about the opportunity we have in our non-DOCSIS product lines. We will continue to keep you posted as we continue to define our strategies. Now on the second quarter results on Slide 4. Aurora Networks delivered net sales of $319 million and adjusted EBITDA of $46 million. Revenue was down 1% year-over-year and adjusted EBITDA was down 43%. Adjusted EBITDA was in line with our expectations. As indicated in our first quarter earnings call, the second quarter was going to be a challenging quarter-over-quarter comparative due to very strong legacy product and license sales in the second quarter of 2025. Our Aurora adjusted EBITDA guidance for the full year is now $200 million to $225 million. As indicated on our last call, the business continues to be impacted by 2 major items in 2026, memory chip issues and stranded G&A costs. On the memory chip issue, the impact on our forecast is approximately $40 million. This is higher than our previous forecast. In addition, we are experiencing some customer upgrade delays. We continue to deal with memory availability and pricing issues associated with memory chips. Our visibility is limited. However, we successfully managed the first half of the year with multiyear forecasted demand as well as passing on a portion of the increased cost to our customers. We continue to be focused on alternatives to minimize the impact of memory cost and availability. Our stranded cost impact in 2026 is approximately $20 million. We expect the majority of stranded costs associated with CCS and Ruckus divestitures to be eliminated by 2027 with all stranded costs eliminated by 2028. The market for DOCSIS 4.0 products continues to be strong as we deploy our suite of products, including amplifiers and nodes. Our FDX deployment with Comcast continues to go well. We continue to make headway with our suite of next-generation ESD amplifiers and are now shipping to multiple large North American MSOs. We expect shipments to ramp up over the next couple of quarters, and these products will continue to ship over multiple years. We continue making progress on the unified products. We shipped and deployed the unified node in the second quarter. The unified node allows our customers to choose between either the ESD or FDX technology within a single device. The unified amplifiers have started lab testing, and we expect to start shipping at the beginning of 2027. In the second quarter, cable operators continued upgrading their E6000 and C100G CCAP deployments to help them deliver low-latency Internet without requiring major infrastructure replacement. Also, during the quarter, we continued our development of our vCCAP with a Remote PHY solution to key customers in Europe with a significant win and deployment program, which will span 3 years. During the quarter, Aurora continued to solidify its relationship with DvSum. As announced last year, Aurora began partnering with DvSum to offer an AI version of Aurora's ServAssure NXT platform. The solution combines DvSum's self-service analytics technology for call center and network operations with Aurora's ServAssure network monitoring solution. This AI-based tool allows for advanced triage and proactive analytics, network optimization and fault management. The recently signed agreement allows Aurora to participate in DvSum's growth through a warrant. Although initially modest, DvSum's AI product offering has an opportunity to be used in a multitude of applications beyond Aurora's ServAssure. We had our first win with the platform in Latin America to monitor both HFC and PON networks. As stated before, we believe Aurora is well positioned with decades of knowledge of our customers' ecosystem and a broad array of new products for service providers to take advantage of the latest DOCSIS 4.0 upgrade cycle as well as expanding their current DOCSIS 3.1 networks. The new products position Aurora Networks to maintain performance. And with that, I'd like to turn things over to Kyle to talk more about our second quarter results. Kyle Lorentzen: Thank you, Chuck, and good morning, everyone. I'll start with an overview of our second quarter results on Slide 5. For Vistance Networks continuing operations, net sales ended at $320 million, down $4 million or 1% year-over-year. The stranded costs associated with the Ruckus business, memory chips and reduction in legacy license sales drove EBITDA down $17 million or 32% to $36 million. Adjusted EPS for the second quarter was down 8% to $0.12 per share versus $0.13 in the second quarter of 2025. It should be noted the continuing operations presentation is the required U.S. GAAP presentation and does not reflect true performance of the business due to allocation methodology of shared costs. Vistance Networks, including Ruckus, adjusted EBITDA for the second quarter was $76 million, down 40% versus prior year as a result of memory chip pricing, reduction in legacy license sales, stranded costs associated with the divestitures and pull-ahead Ruckus revenue from pending second quarter 2025 tariffs. As indicated in our first quarter earnings call, we expected a year-over-year decline in the second quarter of Vistance Networks, including Ruckus, adjusted EBITDA. Turning now to our second quarter segment highlights on Slide 6. Aurora Networks segment second quarter net sales of $319 million was down 1% from the prior year as increased shipments of our DOCSIS 4.0 products were slightly offset by a decline in our legacy product sales. As we have mentioned, the second quarter of 2025 was an unusually strong quarter for our legacy license sales. As we have discussed in the past, Aurora Networks is a project-driven business with timing of projects driving some volatility in quarterly results, both from a revenue and EBITDA perspective. The second quarter comparative is an example of the volatility. Aurora Networks adjusted EBITDA of $46 million was down $34 million or 43% from the prior year, driven by lower margins due to decreased high-margin legacy license sales, memory chip pricing and stranded costs. The second quarter impact of memory pricing and stranded costs year-over-year is approximately $15 million. The $46 million of adjusted EBITDA was in line with our expectations provided on our first quarter earnings call. Aurora order rates were down 55% in the second quarter of 2026 versus prior year, primarily due to timing of orders. Subsequent to quarter end, we received approximately $200 million of orders in July. Aurora backlog ended the second quarter at $470 million, down $82 million or 15% versus the end of the second quarter 2025. Aurora remains well positioned to take advantage of upgrade cycles while offsetting declines in the legacy business. Turning to Slide 7 for an update on cash flow. We ended the quarter with $152 million of cash on hand. This was above our projection of $125 million. As expected in the quarter, cash flow from operations was a use of $73 million and free cash flow was a use of $75 million due to working capital needs and Ruckus transaction costs. Subsequently, after the end of the second quarter, the Board approved a special distribution of $5 per share or $1.15 billion. The distribution will be paid before the end of August and is expected to be treated as a return of capital for tax purposes. The distribution will be paid without putting any leverage on the company. With no leverage and ample cash on hand, we are well positioned to take advantage of strategic opportunities. As Chuck mentioned earlier, we are excited about the Ruckus transaction as it further unlocks shareholder value and provides an opportunity to return additional cash to shareholders. Turning to Slide 8 for an update on our liquidity and capital structure. During the second quarter, our cash and liquidity remained strong. As indicated, we ended the quarter with $152 million in cash on hand. As of the end of July, post Ruckus transaction, we have $1.9 billion of cash, approximately $1.15 billion of this cash will be distributed through the special distribution. In the quarter, we did not purchase any equity on the open market. However, we will continue to evaluate opportunities to buy back stock. And as we mentioned on the earnings call in April, in Q2, the Board of Directors approved the buyback of up to $100 million. Our ample liquidity gives us opportunity to potentially increase our buyback program if warranted. The company ended the quarter with no outstanding debt. In the second quarter, the company entered into a new revolving credit agreement with Citibank in an aggregate amount up to $300 million, subject to borrowing base availability. Post the Ruckus divestiture, the ABL commitment was lowered to $247 million with a borrowing base of $177 million. At the end of the second quarter, our current availability was $137 million. Based on our cash on hand, cash flow expectations and leverage capability, we have ample opportunity to invest in growth and value creation, either organically or inorganically. Based on our projections after the special distribution, we expect to end 2026 with cash on hand between $700 million and $750 million. In addition to our significant projected cash at year-end 2026, we expect to receive $160 million refund from the IRS in the second half of 2027 related to our tax planning divestiture strategy. In total, with 2026 year-end cash and the 2027 refund, we would expect to have approximately $850 million to $900 million of cash at the end of 2027 before taking into account cash generation during 2027. This provides us with significant cash for investment. I will conclude my prepared remarks with commentary around our expectations for the remainder of 2026. As we look to the remainder of the year, we delivered solid execution in the first half, but the memory pricing and availability environment has deteriorated faster and further than we expected at the end of the first quarter. As a result, we are lowering our full year adjusted EBITDA guidepost down $25 million to $200 million to $225 million. This revised range reflects the memory cost increases we can currently quantify, memory availability and customer willingness to invest at elevated price levels. Given the uncertainty of memory price increases and continued supply tightness, we caution that results could fall to the lower end of or below this range if conditions worsen. We remain confident in the underlying demand for our products. We look forward to continuing to develop and implement the Vistance strategy focused on taking advantage of the DOCSIS 4.0 upgrade cycle, managing our legacy business and investing in future technologies and new markets. And with that, I'd like to give the floor back to Chuck for some closing remarks. Charles Treadway: Thank you, Kyle. In closing, we are very excited about the Ruckus transaction and the value it creates and the cash it returns to our shareholders. I want to thank the Ruckus team for all they have done to make this deal possible and position the business for continued success. The transaction positions us with significant cash for investment. We will evaluate growth opportunities, including organic and inorganic investments. These investments could include investing more aggressively in existing or new technology and evaluating potential acquisitions to broaden our technology and the markets we serve. In addition, we will continue to evaluate buying our stock. We look forward to sharing next steps in upcoming quarters. And with that, we'll now open the line for questions. Operator: [Operator Instructions] Our first question is going to come from the line of George Notter with Wolfe Research. George Notter: I guess I was hoping to get level set on the existing Aurora business. I'm curious about what customer concentration looks like. I think there's 2 customers here that are probably a pretty significant piece of the revenue. I'm just wondering what that looks like. And I'd be interested in what that looked like in the year ago quarter as well or maybe year-to-date or maybe 2025, whatever metrics you can give us? And then also, I'm just curious on what the revenue mix looks like between legacy, CMTS, virtual CMTS, optical nodes, amplifiers, anything you can say there would be great, too. Charles Treadway: Okay. Thanks, George. I'll take the first part of the question, and Kyle could get into the more financial numbers. But first of all, I think of it as the legacy side of our business, which is where we have the E6000 and the C100G plus the licenses and the SLA and some head-end optic equipment. This is the business that we call legacy. And as we indicated, this business will decline as the virtual CMTS and the DOCSIS 4.0 edge products replace that head-end equipment. We did have really strong legacy sales in '25, primarily related to license sales that aren't going to repeat. And moving forward, we'd expect this business to decline year-over-year, but nowhere near the rate we saw from '25 to '26. We should let you know that the margins in this business are higher than the other product lines. And in '26, this represents about 15% of Aurora's total revenue and 25% of adjusted EBITDA. And then the DOCSIS 4.0 products, think about that as the new stuff, that's amplifiers, nodes, modules, virtual CMTS and NMS. And these products are what's linked to the upgrade cycle that's going on right now. And we expect the revenue of these products to grow off the '25 base over the next few years. And then we have a video business that's -- video products that -- where we have infrastructure, programmer advertising. The largest segment of that business is programmer. We have a significant legacy installation there. And as upgrades are done, we're well positioned. We don't -- this is going to be -- think about minimal growth and volatile. And just one example of that is we were expecting that FCC spectrum to happen this year. That auction -- it happened now, but it's not going to really come into effect and relate to our business until '27 and '28. And then I would say we have 2 smaller businesses. PON is the next one I would talk about. Primarily, we're in Remote OLT PON, which is our big part of the business now. But that said, we do have a relationship and partnership with Altice Labs and this is where we have our chassis PON offering. And we do think this has significant growth potential. And then finally, which I would say is PKI, which is a component of our Security Solutions business. In this segment, we have like digital certification provisioning. We have software licensing for IoT devices, smart networks, digital video systems. And think about like competition in this space would be like DigiCert or Keyfactor. And then however, we really think we have -- although this is a small business for us, we think we have really strong technology that can be scaled with some go-to-market investments. Kyle Lorentzen: The customer concentration, top 3 customers represent about 70% of our revenue, and it's about the same as last year. George Notter: Great. Okay. And then anything more you can tell us on the mix of these different businesses? Chuck, you went through a lot of different pieces there, the legacy, the 4.0, the video infrastructure, PON. Is there a rough cut you could give us in terms of the mix of those pieces? Kyle Lorentzen: Yes. Revenue on the legacy business, as Chuck mentioned, is about 15% of the business. The DOCSIS 4.0 products represent about another 70% of the business. Operator: Our next question will come from the line of Joseph Cardoso with JPMorgan. Marc Vitenzon: This is Marc Vitenzon on for Joseph Cardoso. I guess, first of all, to start off, clearly, lots of different products and technologies on the non-DOCSIS side. I guess with regards to how you're thinking about product strategy and what to focus on, could you please like dive into that a little bit more? Charles Treadway: Well, we talked about the technologies that we feel that are outside of DOCSIS where we have opportunity to grow by investing in our go-to-market strategies, our technology. We mentioned PON. We mentioned PKI and we mentioned vBNG. Those are the technologies I would say that we really haven't paid that much of attention to in the past because of our debt situation and because of the divestitures that we are working on. Now that we have this balance sheet and significant cash flow, we're going to invest in those 3 businesses. And we also mentioned that we also are going to potentially look at inorganic opportunities, and we said that range could be from working with existing technologies or new technologies. We even talked about being outside of the cable market. Marc Vitenzon: Got it. And then maybe one question on the comment regarding customer upgrade delays. Maybe you could just expand on what's driving that a little bit? Is that supply-driven, demand driven? Kyle Lorentzen: I mean, I think the answer to that is the upgrade's underway. I mean we do see -- it's probably more customer-specific as they're deciding what technology to use or upgrade path. We've seen a little bit of that in the first half of the year. So it's more of a customer-specific thing than it would be across the board. I mean I think the upgrade is underway and people are investing. However, there are places where a customer may push a quarter or 2, and we saw a little bit of that in the first half and the second quarter. Operator: And I'm showing no further questions at this time. And I would like to hand the conference back over to Chuck Treadway for closing remarks. Charles Treadway: Yes. I'd like to thank everyone for their support of CommScope, and thank you for your time today. Have a great rest of your week. Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day. 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Vistance Networks, Inc. VISN reported adjusted earnings of 12 cents per share in the second quarter of 2026, down 7.7% year over year and 57.1% below the Zacks Consensus Estimate of 28 cents. Revenues fell 1.4% year over year to $319.6 million and missed the consensus mark of $496 million by 35.5%. Results were pressured by lower high-margin legacy license sales, memory chip pricing and stranded costs.Aurora Networks remained VISN’s core business following the Ruckus divestiture. Second-quarter Aurora revenues declined 1% year over year to $319.2 million, while adjusted EBITDA fell 43.3% to $45.5 million. Order rates declined 55% year over year because of timing, although Aurora received approximately $200 million of orders in July. Vistance Networks, Inc. price-consensus-eps-surprise-chart | Vistance Networks, Inc. Quote Aurora’s revenue decline was modest, but the earnings impact was significantly greater because the year-ago quarter benefited from unusually strong, high-margin license sales. Higher amplifier shipments partially offset the decline in legacy products, but the unfavorable mix weighed on profitability.Memory chip pricing and availability added to the pressure. Management now estimates the memory-related impact on its 2026 forecast at approximately $40 million, higher than previously expected. Customer upgrade delays are also affecting visibility, while the company continues pursuing alternatives to reduce the impact of higher memory costs. Aurora continues to benefit from the multiyear DOCSIS 4.0 upgrade cycle. The company is well positioned in amplifiers and nodes, with next-generation ESD amplifiers now shipping to multiple large North American multiple-system operators. Management expects shipments to ramp over the next several quarters and continue for multiple years.Aurora also shipped and deployed its unified node during the quarter. The product allows customers to select ESD or FDX technology within a single device. Unified amplifiers have entered laboratory testing, with shipments expected to begin in early 2027. The company continues its FDX deployment with Comcast and development of its vCCAP Remote PHY solution in Europe. Revenue performance varied significantly by geography. U.S. sales increased 1.1% year over year to $258.1 million, while Asia Pacific and Caribbean and Latin America revenues rose 2.8% and 1.8%, respectively. These gains were offset by declines of 26.3% in Europe, the Middle East and Africa and 15.3% in Canada.Aurora’s second-quarter order rates declined 55% year over year, primarily because of order timing. The approximately $200 million of orders received in July provides an important near-term development as the company progresses through the second half. Management is using its stronger post-divestiture balance sheet to evaluate opportunities outside the traditional cable market. Areas under consideration include PON, virtual Broadband Network Gateway products and security solutions, with potential investments spanning technology development, additional resources and acquisitions.The company has also partnered with Altice Labs on PON solutions covering GPON, XGS-PON and 50G-PON technologies. In security, VISN sees opportunities in public key infrastructure and PKI-as-a-Service, while its vBNG products provide another avenue to participate in fixed, wireless and fiber access networks. Vistance used $72.7 million of cash in operating activities and $74.7 million of free cash flow during the second quarter. The cash outflow reflected working capital needs and expenses related to the Ruckus transaction.The company ended June with $151.6 million of cash and cash equivalents, including $38 million classified within assets held for sale. It had no borrowings under its asset-based revolving credit facility and approximately $288.6 million of total liquidity. VISN lowered its full-year 2026 Aurora adjusted EBITDA guidance to $200-$225 million. The revised range reflects continued memory chip pricing and availability challenges as well as approximately $20 million of stranded costs associated with the CCS and Ruckus divestitures.Management expects most stranded costs tied to the divestitures to be eliminated by 2027, with all stranded costs eliminated by 2028. At the same time, it expects the DOCSIS 4.0 upgrade cycle to remain strong for several years and plans to evaluate organic and inorganic investments.Following the $1.846 billion Ruckus sale, VISN approved a $5-per-share special distribution to be paid by the end of August. After the distribution, the company expects $700-$750 million of year-end cash with no debt, while retaining $100 million of share-repurchase authority and expecting a $160 million tax refund in the second half of 2027. Vistance currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Keysight Technologies, Inc. KEYS is scheduled to release third-quarter fiscal 2026 earnings on Aug. 18. The Zacks Consensus Estimate for earnings is pegged at $2.46 per share, suggesting growth of 43.02% from the year-ago reported figure.Keysight has a long-term earnings growth expectation of 19.44%. The company delivered an average earnings surprise of 9.46% in the last four reported quarters.Analog Devices, Inc. ADI is set to release third-quarter fiscal 2026 earnings on Aug. 19. The Zacks Consensus Estimate for earnings is pegged at $3.33 per share, implying growth of 62.44% from the year-ago reported figure.Analog Devices has a long-term earnings growth expectation of 31.04%. The company delivered an average earnings surprise of 5.48% in the last four reported quarters.Applied Materials, Inc. AMAT is scheduled to release third-quarter fiscal 2026 earnings on Aug. 13. The Zacks Consensus Estimate for earnings is pegged at $3.36 per share, suggesting growth of 35.48% from the year-ago reported figure.Applied Materials has a long-term earnings growth expectation of 32.44%. The company delivered an average earnings surprise of 6.06% in the last four reported quarters. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Vistance Networks, Inc. (VISN) : Free Stock Analysis Report Analog Devices, Inc. (ADI) : Free Stock Analysis Report Applied Materials, Inc. (AMAT) : Free Stock Analysis Report Keysight Technologies Inc. (KEYS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Second Quarter Highlights Net sales of $319.6 million GAAP income from continuing operations of $26.1 million Non-GAAP adjusted EBITDA of $35.8 million (1) Core non-GAAP adjusted EBITDA of $45.5 million* (1) Cash flow used in operations of $(72.7) million and free cash flow of $(74.7) million (2) RICHARDSON, Texas, August 06, 2026--(BUSINESS WIRE)--Vistance Networks, Inc. (NASDAQ: VISN), a global leading provider of intelligent network solutions, today reported results for the quarter ended June 30, 2026. "This morning, in conjunction with the closing of the RUCKUS transaction on July 1, 2026, we announced the plan for a special distribution of $5.00 per share to be paid by the end of August 2026. Upon payment of this special distribution, in total, we will have returned $15.00 per share or $3.4 billion to our shareholders this year while repaying all debt and redeeming all preferred equity. We are pleased with the outcome of our divestiture strategy as it has unlocked significant value for our shareholders while positioning the business for future value creation. Following, the special distribution, we expect to end the year with between $700 and $750 million of cash with no outstanding debt allowing us to further invest in Vistance. In addition in 2027, we expect a tax refund of $160 million related to our divesture tax strategy. We will have significant funds to evaluate growth opportunities including organic and inorganic investments. These investments could range from investing more aggressively in existing or new technology to evaluating potential acquisitions to broaden the markets we participate in, our technology portfolio and our customer base. As part of our investment strategy, we will continue to evaluate stock buybacks under the $100 million of authority the Board has approved for the buyback program," said Chuck Treadway, President and Chief Executive Officer. "The Aurora business delivered $319 million of revenue and $46 million of Adjusted EBITDA in the second quarter. This was generally aligned with our expectations and down versus the prior year due to strong license sales in the second quarter of 2025, memory chip pricing and stranded costs associated with the divestitures. Our full year adjusted EBITDA guideposts of $200 to $225 million are down $25 million versus the first quarter guideposts driven by continued challenges with memory chip pricing and availability. We remain confident in the underlying demand for our products," said Kyle Lorentzen, Chief Financial Officer. On July 1, 2026, the Company completed the previously announced sale of its RUCKUS segment to Belden Inc. (Belden) pursuant to the Purchase Agreement, dated as of April 29, 2026, in which Belden acquired the RUCKUS segment on a cash-free, debt-free basis, in exchange for approximately $1.846 billion in cash, subject to certain adjustments. As a result of the RUCKUS sale, unless otherwise noted, these financial results relate to Vistance Networks’ continuing operations based on our remaining Aurora segment. For all periods presented, amounts have been recast to reflect these changes. Second Quarter Results and Comparisons Net sales in the second quarter of 2026 decreased 1.4% year-over-year to $319.6 million with decreases in the Europe, Middle East and Africa (EMEA) region and Canada, partially offset by increases in the United States (U.S.), the Asia Pacific (APAC) region and the Caribbean and Latin America (CALA) region. Income from continuing operations of $26.1 million, or $0.06 per diluted share, in the second quarter of 2026, increased compared to income from continuing operations of $5.9 million, or $(0.05) per diluted share in the same prior year period. Non-GAAP adjusted net income for the second quarter of 2026 was $28.2 million, or $0.12 per diluted share, decreased compared to $36.7 million, or $0.13 per diluted share, in the same prior year period. Core non-GAAP adjusted EBITDA decreased 43.3% to $45.5 million in the second quarter of 2026 compared to $80.2 million in the same prior year period. Core non-GAAP adjusted EBITDA as a percentage of net sales decreased to 14.2% in the second quarter of 2026 compared to 24.7% in the same prior year period. Non-GAAP adjusted EBITDA decreased 32.1% to $35.8 million in the second quarter of 2026 compared to $52.7 million in the same prior year period. Non-GAAP adjusted EBITDA as a percentage of net sales decreased to 11.2% in the second quarter of 2026 compared to 16.3% in the same prior year period. Second Quarter Comparisons Sales by Region Segment Net Sales Segment Operating Income (Loss) Segment Adjusted EBITDA (See "Non-GAAP Financial Measures," below) Net Sales, Cash Flow and Balance Sheet Aurora net sales of $319.2 million decreased 1.0% from the prior year period driven by a decrease in the legacy business, partially offset by an increase in the Access Technologies business. GAAP cash flow used in operations in the second quarter of 2026 was $72.7 million. Free cash flow used in the second quarter of 2026 was $74.7 million after adjusting operating cash flow for $2.0 million of additions to property, plant and equipment. The cash flows related to discontinued operations have not been segregated. Accordingly, this cash flow information includes the results of continuing and discontinued operations. The Company ended the quarter with $151.6 million in cash and cash equivalents which includes $38.0 million in cash and cash equivalents in assets held for sale. As of June 30, the Company had no outstanding borrowings under its asset-based revolving credit facility and had availability of $137.0 million, after taking into account the borrowing base limitations and outstanding letters of credit. The Company ended the quarter with total liquidity of approximately $288.6 million. Conference Call, Webcast and Investor Presentation As previously announced, Vistance Networks will host a conference call today at 8:30 a.m. ET in which management will discuss second quarter of 2026 results. The conference call will also be webcast. The live, listen-only audio of the call will be available through a link on the Events and Presentations page of Vistance Networks’ Investor Relations website. A webcast replay will be archived on Vistance Networks’ website for a limited period of time following the conference call. During the conference call, the Company may discuss and answer questions concerning business and financial developments and trends that have occurred after quarter-end. The Company’s responses to questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been disclosed previously. About Vistance Networks: Vistance Networks (NASDAQ: VISN) shapes the future of communications technology, pushing past what is possible. We deliver solutions that bring reliability and performance to a world always in motion. Our global team of innovators and employees are trusted advisors who listen to customers first, then deliver value. Discover more at www.vistancenetworks.com. Follow us on LinkedIn. Non-GAAP Financial Measures Management believes that presenting certain non-GAAP financial measures enhances an investor’s understanding of our financial performance. Management further believes that these financial measures are useful in assessing Vistance Networks’ operating performance from period to period by excluding certain items that we believe are not representative of our core business. Management also uses certain of these financial measures for business planning purposes and in measuring Vistance Networks’ performance relative to that of its competitors. Management believes these financial measures are commonly used by investors to evaluate Vistance Networks’ performance and that of its competitors. However, Vistance Networks’ use of certain non-GAAP terms may vary from that of others in its industry. Non-GAAP financial measures should not be considered as alternatives to operating income (loss), net income (loss), cash flow from operations or any other performance measures derived in accordance with U.S. GAAP as measures of operating performance, operating cash flows or liquidity. A reconciliation of each of the non-GAAP measures discussed herein to their most comparable GAAP measures is below. Core Measures Management believes that presenting Core financial measures enhances the investor’s understanding of the financial performance of the Company’s core businesses. Core financial measures are the results of our Aurora segment and exclude general corporate costs that were previously allocated to the RUCKUS segment and CCS segment, since these costs were not directly attributable to the discontinued operations. The Core results represent the business results as currently managed and reported by Vistance Networks. Future results and the composition of any business divested in the future may vary and differ materially from the presentation of the Core financial measures. Forward Looking Statements This press release includes certain statements that constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect our current views with respect to future events and financial performance. These forward-looking statements are generally identified by their use of such terms and phrases as "intend," "goal," "estimate," "expect," "project," "projections," "plans," "potential," "anticipate," "should," "could," "designed to," "foreseeable future," "believe," "think," "scheduled," "outlook," "target," "guidance" and similar expressions, although not all forward-looking statements contain such terms. This list of indicative terms and phrases is not intended to be all-inclusive. These forward-looking statements are subject to various risks and uncertainties, many of which are outside our control, including, without limitation, our dependence on customers’ capital spending on data, communication and entertainment equipment, which could be negatively impacted by a regional or global economic downturn, among other factors; the potential impact of higher than normal inflation; concentration of sales among a limited number of customers; risks associated with our sales through channel partners; changes to the regulatory environment in which we and our customers operate; changes in technology; industry competition and the ability to retain customers through product innovation, introduction, and marketing; changes in cost and availability of key components, including memory chips, and the potential effect on customer pricing and timing of delivery of products to customers; risks related to our ability to implement price increases on our products and services; risks associated with our dependence on a limited number of key suppliers for certain components; risks related to the successful execution of our initiatives related to stranded costs reductions; potential difficulties in realigning manufacturing capacity and capabilities between our manufacturing facility and facilities of our contract manufacturers that may affect our ability to meet customer demands for products; possible future restructuring actions; the risk that our manufacturing operations, including our contract manufacturers on which we rely, encounter capacity, production, quality, financial or other difficulties causing difficulty in meeting customer demands; our ability to incur indebtedness at acceptable interest rates or at all; our ability to generate cash to service any future indebtedness; our ability to fully realize anticipated benefits from prior or future divestitures, acquisitions or equity investments; possible future additional impairment charges for fixed or intangible assets, including goodwill; our ability to attract and retain qualified key employees; labor unrest; product quality or performance issues, including those associated with our suppliers or contract manufacturers, and associated warranty claims; our ability to maintain effective management information technology systems and to successfully implement major systems initiatives; cyber security incidents, including data security breaches, ransomware or computer viruses; the use of open standards; the long-term impact of climate change; significant international operations exposing us to economic risks like variability in foreign exchange rates and inflation, as well as political, geopolitical and other risks, including the impact of wars, regional conflicts and terrorism; our ability to comply with governmental anti-corruption laws and regulations worldwide; the impact of export and import controls and sanctions worldwide on our supply chain and ability to compete in international markets; changes in the laws and policies in the U.S. affecting trade, including the risk and uncertainty related to tariffs or potential trade wars and potential changes to laws and policies, that may impact our products and costs; the costs of protecting or defending intellectual property; costs and challenges of compliance with domestic and foreign social and environmental laws; the impact of litigation and similar regulatory proceedings in which we are involved or may become involved, including the costs of such litigation; the scope, duration and impact of disease outbreaks and pandemics, such as COVID-19, on our business, including employees, sites, operations, customers, supply chain logistics and the global economy; our stock price volatility; income tax rate variability and ability to recover amounts recorded as deferred tax assets; and other factors beyond our control. These and other factors are discussed in greater detail under the heading "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2025, and may be updated from time to time in our annual reports, quarterly reports, current reports and other filings we make with the Securities and Exchange Commission. Although the information contained in this press release represents our best judgment as of the date of this release based on information currently available and reasonable assumptions, we can give no assurance that the expectations will be attained or that any deviation will not be material. Given these uncertainties, we caution you not to place undue reliance on these forward-looking statements, which speak only as of the date made. We are not undertaking any duty or obligation to update this information to reflect developments or information obtained after the date of this press release, except to the extent required by law. View source version on businesswire.com: https://www.businesswire.com/news/home/20260806737046/en/ Contacts Investor Contact: Jenny [email protected] News Media Contact: Luke [email protected]

This article first appeared on GuruFocus. Revenue: Vistance Networks continuing operations net sales were $320 million, down 1% year-over-year. Aurora Networks Revenue: Segment net sales were $319 million, down 1% from the prior year. Adjusted EBITDA: Continuing operations adjusted EBITDA was $36 million, down 32% year-over-year. Aurora Networks Adjusted EBITDA: $46 million, down 43% year-over-year. Adjusted EPS: $0.12 per share, down 8% from $0.13 in the second quarter of 2025. Cash Flow: Cash flow from operations was a use of $73 million; free cash flow was a use of $75 million. Cash Position: Ended the quarter with $152 million in cash on hand. Backlog: Aurora backlog ended at $470 million, down 15% year-over-year. Order Rates: Aurora order rates were down 55% year-over-year, with approximately $200 million in orders received in July. Full-Year Adjusted EBITDA Guidance: Lowered to $200 million to $225 million for Aurora Networks. Warning! GuruFocus has detected 4 Warning Signs with VISN. Is VISN fairly valued? Test your thesis with our free DCF calculator. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Completed the sale of Ruckus to Belden for $1.846 billion, unlocking significant shareholder value through an all-cash transaction. Approved a special distribution of $5 per share, expected to be treated as a return of capital for tax purposes, returning a total of $15 per share to shareholders from divestitures. Ended the quarter with no outstanding debt and a strong cash position, with expectations to end 2026 with $700-$750 million in cash, providing ample liquidity for investments. Aurora Networks is well positioned in the DOCSIS 4.0 upgrade cycle, with new products like unified nodes and amplifiers shipping to multiple large North American MSOs. Expanding into non-cable markets with growth opportunities in PON, vBNG, and Security Solutions (PKI), including a partnership with Altice Labs and a warrant agreement with DvSum for AI-based network analytics. Received approximately $200 million in orders in July 2026, indicating strong demand and a solid backlog of $470 million. Adjusted EBITDA for Aurora Networks declined 43% year-over-year in Q2 2026, impacted by lower legacy license sales, memory chip pricing, and stranded costs. Memory chip issues have worsened, with the impact on 2026 forecast increased to approximately $40 million, leading to a lowered full-year adjusted EBITDA guidance to $200-$225 million. Customer upgrade delays are occurring, with some customers pushing out orders by a quarter or two, affecting revenue timing. Aurora order rates were down 55% year-over-year in Q2 2026, primarily due to timing of orders, indicating potential volatility. Stranded costs from divestitures are expected to be approximately $20 million in 2026, with full elimination not expected until 2028. Cash flow from operations was a use of $73 million in Q2 2026 due to working capital needs and Ruckus transaction costs, and the company faces uncertainty in memory pricing that could push results to the lower end of guidance. Q: What is the breakdown of Aurora's revenue mix between legacy, DOCSIS 4.0, video, PON, and PKI businesses, and what is the customer concentration? A: CEO Chuck Treadway detailed that the legacy business (E6000, C100G, licenses, SLA) represents about 15% of Aurora's total revenue and 25% of adjusted EBITDA, with high margins but expected to decline. DOCSIS 4.0 products (amplifiers, nodes, modules, virtual CMTS, NMS) represent about 70% of the business and are tied to the upgrade cycle. The video business is expected to have minimal growth and volatility, while PON and PKI are smaller but have significant growth potential. CFO Kyle Lorentzen added that the top three customers represent about 70% of revenue, consistent with the prior year. Q: Can you provide more detail on the product strategy and focus areas for the non-DOCSIS technologies? A: CEO Chuck Treadway explained that the company is now focusing on three key non-DOCSIS technologies: PON, PKI (Security Solutions), and vBNG. These were previously underinvested due to debt and divestiture focus, but with the strong balance sheet and cash flow, the company plans to invest in go-to-market strategies and technology. They are also evaluating inorganic opportunities, potentially outside the cable market, with disciplined valuations. Q: What is driving the customer upgrade delays mentioned in the prepared remarks? A: CFO Kyle Lorentzen clarified that the upgrade delays are customer-specific rather than broad-based. Customers are deciding on technology paths and upgrade timelines, with some pushing orders out a quarter or two. The overall DOCSIS 4.0 upgrade cycle is still underway, but the company saw some timing delays in the first half of the year. Q: What is the impact of memory chip issues and stranded costs on the 2026 forecast, and how is the company managing these challenges? A: CEO Chuck Treadway stated that the memory chip issue impact on the forecast is approximately $40 million, higher than previously forecast, due to availability and pricing. The company is managing through multiyear forecasted demand and passing on some increased costs to customers. Stranded costs from the CCS and Ruckus divestitures are approximately $20 million in 2026, with the majority expected to be eliminated by 2027 and all by 2028. Q: What is the status of the DOCSIS 4.0 product deployments, including the FDX and ESD amplifiers and unified products? A: CEO Chuck Treadway reported that the FDX deployment with Comcast is going well. The company is shipping next-generation ESD amplifiers to multiple large North American MSOs, with shipments expected to ramp up over the next couple of quarters. The unified node was shipped and deployed in Q2, allowing customers to choose between ESD or FDX technology in a single device. Unified amplifiers are in lab testing with shipments expected to begin in early 2027. Q: Can you elaborate on the vBNG product and the recent agreement with Ruckus for mobile data offload? A: CEO Chuck Treadway explained that the vBNG is a cloud-native software solution that separates routing and subscriber management from physical hardware, allowing service providers to manage multiple access networks. In Q2, the company signed an arm's length agreement with Ruckus to partner on specific mobile data offload products being sold to major US wireless carriers, leveraging the virtualized system for wireless gateways. Q: What is the company's cash position and capital allocation strategy following the Ruckus sale? A: CFO Kyle Lorentzen stated that post-Ruckus transaction, the company has $1.9 billion in cash. After the special distribution of $5 per share ($1.15 billion), the company expects to end 2026 with $700 million to $750 million in cash. Additionally, a $160 million IRS tax refund is expected in the second half of 2027. The company has no outstanding debt and a new $247 million ABL facility, providing ample liquidity for organic and inorganic investments, as well as potential stock buybacks under the $100 million program. Q: What is the outlook for the remainder of 2026, and why was the adjusted EBITDA guidance lowered? A: CFO Kyle Lorentzen explained that the full-year adjusted EBITDA guidance was lowered by $25 million to $200 million to $225 million due to the memory pricing and availability environment deteriorating faster than expected. The revised range reflects quantified memory cost increases, availability, and customer willingness to invest at elevated price levels. The company cautions that results could fall to the lower end or below the range if conditions worsen, but remains confident in underlying product demand. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

With an upside potential of 34.46%, Belden Inc. (NYSE:BDC) is among the 7 Best Hardware Stocks to Buy for the AI PC Revolution. On May 1, Truist lowered the firm’s price target on Belden Inc. (NYSE:BDC) to $150 from $184 while maintaining a Buy rating on the shares. The analyst noted that Belden delivered solid Q1 results and issued favorable Q2 guidance, although the acquisition of RUCKUS Networks raised broader questions surrounding long-term strategy and capital allocation. Despite those concerns, the transaction is expected to be approximately 15% accretive to earnings per share, according to the research note. On April 30, Belden Inc. (NYSE:BDC) entered into a definitive agreement to acquire RUCKUS Networks from Vistance Networks for approximately $1.85 billion. The acquisition positions Belden as a leading provider of end-to-end IT and operational technology networking solutions. RUCKUS serves more than 48,000 global customers through an integrated portfolio of Wi-Fi, enterprise switching, and AI-driven cloud networking platforms designed for high-density, mission-critical environments. Belden stated that RUCKUS’ high-margin profile is expected to improve gross margins, adjusted EBITDA margins, and adjusted EPS immediately following the transaction. The company also expects the acquisition to accelerate long-term growth, supported by RUCKUS’ high-single-digit revenue growth, gross margins above 60%, and adjusted EBITDA margins exceeding 20%. Belden plans to prioritize debt reduction post-close, with net leverage projected to decline below 3.0x within the first full year and toward its long-term target of approximately 1.5x by 2029. The acquisition, which has been approved by both companies’ boards, is expected to close in the second half of 2026, subject to regulatory approvals and customary closing conditions. Belden Inc. (NYSE:BDC) founded in 1902 and headquartered in St. Louis, Missouri, is a leading provider of network infrastructure, signal transmission systems, and fiber and copper connectivity solutions. The company serves as a critical infrastructure supplier within the AI and high-performance computing ecosystem by delivering advanced cabling, networking, and connectivity equipment essential for data center expansion, cloud computing infrastructure, and AI-driven industrial automation. Belden’s acquisition of RUCKUS significantly enhances its exposure to high-growth AI-driven networking markets while strengthening its financial profile through higher-margin recurring business. Combined with strong operational execution and earnings accretion potential, the company appears well-positioned to benefit from expanding demand for enterprise connectivity and next-generation infrastructure solutions. While we acknowledge the potential of BDC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 Under-the-Radar Stocks That Are On Fire Right Now and 10 Unrivaled Penny Stocks to Buy Now. Disclosure: None. Follow Insider Monkey on Google News.

Image source: The Motley Fool. April 30, 2026, 8:30 a.m. ET President and Chief Executive Officer — Charles Treadway Chief Financial Officer — Kyle Lorentzen Charles Treadway: Thank you, Jenny. Good morning, everyone. I'll begin on Slide 3. This morning, we announced that we have entered into a definitive agreement to sell our RUCKUS Networks business to Belden for $1.846 billion in an all-cash transaction. The deal is subject to customary closing conditions, including receipt of applicable regulatory approvals. We currently expect the deal to close in the second half of 2026. After a detailed evaluation of our remaining businesses after the CCS transaction, it became clear that the remaining 2 businesses needed to be separated. Our equity value continued to be impacted by the different business models and valuation profiles. The attractiveness of the RUCKUS business allowed us to achieve the separation in a transaction that we believe further unlocks shareholder equity value. Belden is a favorable buyer of the business for our customers and employees as they will continue to support the investment required to further grow RUCKUS innovative products and services. We expect to distribute a significant portion of the excess cash from this transaction to our shareholders as a special distribution within 60 days following the closing of the proposed transaction. The exact amount and timing of the dividend will be determined by the Board after closing, taking into account all relevant factors. The transaction will leave only our Aurora business in the portfolio. We expect to continue to run Aurora as a public company. As a player of scale in the DOCSIS market, we will evaluate growth opportunities, including potential acquisitions to broaden our technology portfolio and customer relationships. We are excited about the opportunity to dedicate our focus to the Aurora business. As we move through the year, we will provide updates on the pending transaction and positioning of Vistance Networks as appropriate. Now on to first quarter results on Slide 4. I'm pleased to announce that in the first quarter, Vistance Networks delivered net sales of $472 million, a year-over-year increase of 22% and core adjusted EBITDA of $87 million, a year-over-year increase of 38%. For clarification, Vistance Networks results include our 2 remaining businesses, Aurora and RUCKUS. The positive results were generated by stronger-than-expected performance in both segments. We are on track to achieve our 2026 adjusted EBITDA guidepost of $350 million to $400 million. With that, now I'd like to give you an update on each of our businesses. Starting with Aurora Networks. Net sales of $298 million were up 33% in the first quarter compared to the prior year, and adjusted EBITDA was up 32%. These increases were primarily driven by the continued deployment of our DOCSIS 4.0 amplifier and node products. Our FDX amplifier deployment with Comcast continues to go well, and this is reflected in our results. Since the beginning of 2025, we have shipped more than 500,000 FDX amplifiers. We continue to make headway with our suite of next-generation ESD DOCSIS 4.0 amplifiers and are now shipping to multiple large North American MSOs. We expect shipments to ramp up over the next couple of quarters, and these products will continue to ship over multiple years. We are also making progress on the unified products. We expect to start production on unified nodes in the second quarter and expect to start shipping in the second half of 2026. The unified node allows our customers to choose between either the 1.8 gigahertz ESD or FDX technology within a single device. The unified amplifiers have started lab testing, and we expect to start shipping at the beginning of 2027. During the quarter, we began the rollout of our vCCAP solution with Vodafone Germany. This is quite significant as we will be the go-forward solution displacing one of our competitors. The network upgrade includes Aurora Networks cloud-native vCCAP Evo, providing significant enhancements to the operator service offerings, paving the way to DOCSIS 4.0. This deployment demonstrates the flexibility of our standards-based solution to best meet the unique requirements of multiple operator environments. We have now successfully deployed our vCCAP solution with 2 of the largest EMA service providers. In the quarter, we continued development on our next-generation PON products. We are partnering with a Tier 1 CALA customer on their ongoing access and core network evolution through the deployment of our vBNG Evo and PON Evo Series 200 remote OLTs as they upgrade their broadband infrastructure road map. They are migrating to a fiber-to-the-home access architecture based on GPON and XGS-PON technologies with the Aurora PON Evo Series 200 remote OLT, which has been deployed in some of the largest CALA regions, offering both residential and business broadband services. The PON Evo Series 200 remote OLT is being deployed in an outside plant node as a stand-alone OLT, supporting up to 8 GPON ports per node and is designed to support up to 128 subscribers per port. The broadband service edge is being upgraded using the vBNG Evo that allows for both the control and user plane separation architecture, which enhances scalability, operation resilience and traffic management. 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 expanding their current DOCSIS 3.1 networks. The new products position Aurora Networks to maintain performance as the market shifts away from our legacy products. With the announcement of the RUCKUS transaction, we're excited to focus our attention on maximizing the value of Aurora, including exploring acquisitions, mergers and investment in new technology that will take us well beyond the DOCSIS 4.0 upgrade cycle. Now moving on to RUCKUS Networks performance. Core RUCKUS Networks revenue was up 14% in the first quarter compared to prior year. Core RUCKUS adjusted EBITDA of $37 million was up 54% versus prior year. We are pleased with both our revenue and core adjusted EBITDA growth in the quarter. First quarter 2026 adjusted EBITDA as a percentage of revenue was 21.3%, which was an approximate 600 basis point improvement over prior year. This is a testament to the team's focus on profitability while growing the top line. We had many strong customer wins in the first quarter, including a collaboration with the Los Angeles Football Club for the deployment of a next-generation WiFi 7 network at BMO Stadium. The early industry installation for Major League Soccer establishes a new benchmark for high-density wireless connectivity and sports venues designed to elevate every facet of the fan journey. The deployment leverages a strategic mix of RUCKUS WiFi 7 Access Points, including the high-performance T670 for under-seat coverage and the T670sn with hyper directional antenna technology for precise high-density targeting in concourses and club spaces. This architecture provides blanket high-speed coverage capable of supporting tens of thousands of concurrent connections. In addition to customer wins, the subscription product, RUCKUS One, continues to be a key priority as we move towards a subscription license and support model. In the quarter, we won our largest ever RUCKUS One deal with a Tier 1 North American service provider. We experienced strong growth in RUCKUS One and our service offerings, driving revenue growth of 12% versus first quarter of 2025. During the quarter, we announced the expansion of our Pro AV ICX network switch portfolio and introduced an AV-enhanced update to its management platforms. These advancements support the global market shift away from legacy video transport solutions towards Ethernet-based systems. Before handing the call over to Kyle, I would like to provide an update on the DDR4 memory chip supply issue that continues to impact most companies in our industry. As you can see from our results, we were able to manage the tight supply and higher pricing on memory chips in the first quarter in both businesses. Our supplier relationships, inventory position, product redesign and pricing were key in our ability to manage the issue in the first quarter. As we move into the second quarter, we are continuing to use these levers. We have good visibility into the second quarter and any impact is included in our second quarter expectations. As we look beyond the second quarter, visibility is limited, both from a supply and pricing perspective. We will continue to use our levers to navigate the challenging memory chip market conditions. And with that, I'd like to turn things over to Kyle to talk more about our first quarter results. Kyle Lorentzen: Thank you, Chuck, and good morning, everyone. I'll start with an overview of our first quarter results on Slide 5. For Vistance Networks' continuing operations, net sales ended at $472 million, up $84 million or 22% year-over-year. Increase in revenue drove continuing operations adjusted EBITDA up $40 million or 85% to $87 million. Adjusted EPS for the first quarter was up 209% to $0.34 per share versus $0.11 per share in the first quarter of 2025. Vistance Networks core adjusted EBITDA for the first quarter was $87 million, up 38% versus prior year as a result of the increase in revenue. First quarter adjusted EBITDA as a percentage of revenue of 18.5% was 230 basis points better than prior year same quarter, driven by stronger leverage in RUCKUS, partially offset by lower margin product mix in Aurora and stranded costs. The first quarter ended stronger than we had expected in both businesses. Order rates were up 37% sequentially in the first quarter of 2026 and up 49% versus prior year. Vistance Networks backlog ended the quarter at $843 million, up $211 million or 33% versus the end of the fourth quarter 2025. Turning now to our first quarter segment highlights on Slide 6. Please refer to Slide 5 to view both the RUCKUS Networks and core RUCKUS Network results. Starting with our Aurora Networks segment. First quarter net sales of $298 million increased 33% from the prior year as shipments of our DOCSIS 4.0 products increased. Aurora Networks adjusted EBITDA of $50 million was up $12 million or 32% from the prior year, driven by higher amplifier revenue. EBITDA as a percentage of sales was essentially flat with last year at 16.9% as lower margins driven by product mix was offset by operating cost management. Sequentially, in the second quarter of 2026, we expect revenue and adjusted EBITDA to be in line with the first quarter. However, we would expect year-over-year 2026 second quarter adjusted EBITDA to be down due to strong legacy license revenue in the second quarter of 2025. We expect the second half Aurora adjusted EBITDA to be stronger than the first half. As we have discussed in the past, Aurora Networks is a project-driven business with timing of projects driving some volatility in quarterly results, both from a revenue and EBITDA perspective. The business remains well positioned to take advantage of upgrade cycles while offsetting declines in the legacy business. With the expected decline in legacy products and the impact of stranded costs, partially offset by improving DOCSIS 4.0 revenue, we continue to expect Aurora adjusted EBITDA to be down in 2026 versus 2025. Core RUCKUS net sales of $173 million increased by 14% versus the first quarter of 2025, driven by market demand as well as our go-to-market and vertical initiatives. Core RUCKUS adjusted EBITDA of $37 million increased 54% from the prior year as a result of higher revenue, improved margins driven by our new switch portfolio and leverage of our fixed costs. We continue to see strong market conditions driven by the WiFi 7 upgrade cycle. In addition to better market conditions, our investment in sales has positioned us to grow faster than the market. Core RUCKUS bookings were up 33% from fourth quarter 2025. We continue to drive our vertical market strategies and new product initiatives and are well positioned to grow faster than market as we move through 2026. Moving forward, the RUCKUS business will be presented as held for sale. Finally, early in the quarter, we completed the divestiture of the CCS segment to Amphenol. Note that the activity of the segment was reported as discontinued operations for the quarter. Turning to Slide 7 for an update on cash flow. As expected in the quarter, cash flow from operations was a use of $227 million and free cash flow, a use of $229 million due to working capital needs and timing of our annual cash incentive payout. As we look at cash for 2026, we expect to end the second quarter of 2026 with approximately $125 million of cash on hand. Our projection for year-end cash on hand, excluding proceeds from the RUCKUS transaction, is $150 million to $200 million. As Chuck mentioned earlier, we are excited about the RUCKUS transaction as it unlocks further shareholder value and provides an opportunity to return additional cash to shareholders. The net cash impact of the transaction after fees and taxes is expected to be approximately $1.7 billion. Turning to Slide 8 for an update on our liquidity and capital structure. During the first quarter, our cash and liquidity remained strong. We ended the quarter with $2.5 billion in cash on hand. During the quarter, our cash balance increased approximately $1.6 billion as we closed the CCS divestiture at the beginning of January and repaid all of our existing debt and redeemed the preferred equity. In the quarter, we did not purchase any equity on the open market. However, we will continue to evaluate opportunities to buy back stock, and the Board of Directors recently approved the buyback of up to $100 million. The company ended the quarter with no outstanding debt. In early April, the company entered into a new revolving credit agreement with Citibank in an aggregate amount up to $300 million, subject to borrowing base availability. Based on forecasted inputs, we expect the borrowing base to be approximately $175 million at the end of the second quarter. The revolving credit facility is scheduled to mature in 2031. Subsequent after the end of the first quarter, the Board approved a special distribution of $10 per share. The distribution was paid on April 27 and is expected to be treated as a return of capital for tax purposes. Although we considered putting modest leverage on the company ahead of the distribution, we decided not to proceed due to challenging debt market conditions and the desire for financial flexibility. This position allows us to evaluate investments in Aurora, including bolt-on accretive acquisitions. I will conclude my prepared remarks with commentary around our expectations for the remainder of 2026. We will continue to focus on completing the sale of RUCKUS and implementing the Aurora strategy. We expect Vistance's second quarter adjusted EBITDA to be essentially flat with the first quarter. Second quarter adjusted EBITDA will be down versus prior year due to favorable project timing in Aurora and some pull-ahead revenue in response to tariffs in the second quarter of 2025. In the first quarter, we began taking action to reduce the $30 million of stranded costs that were associated with the CCS transaction. As mentioned previously, the stranded costs are included in our Vistance Networks adjusted EBITDA guideposts. With the pending sale of RUCKUS, we are continuing to evaluate overall stranded costs. Similar to the CCS transaction, final stranded costs on the RUCKUS transaction will be minimal. However, it may take several quarters to reduce the G&A cost structure to the desired levels as we complete the separation of the RUCKUS business, including managing transition service requirements. As we think about the stand-alone Aurora business, our 2026 adjusted EBITDA guideposts are in the $225 million to $250 million range, excluding stranded costs from the RUCKUS transaction. We look forward to continuing to develop and implement the Aurora strategy focused on taking advantage of the DOCSIS 4.0 upgrade cycle, managing our legacy business and investing in future technologies. And with that, I'd like to give the floor back to Chuck for some closing remarks. Charles Treadway: Thank you, Kyle. In closing, we are very excited about the RUCKUS transaction as it unlocks equity value and returns cash to our shareholders. I want to thank the RUCKUS team for all they have done to make this deal possible and position the business for continued success. The transaction now allows us to focus on Aurora and taking advantage of the current DOCSIS 4.0 upgrade cycle while positioning the business with new technology for future growth. And with that, we'll now open the line for questions. Operator: [Operator Instructions] Our first question comes from Samik Chatterjee with JPMorgan. Samik Chatterjee: Maybe just a couple of questions. For the first one, I'm trying to think of the -- you're guiding Aurora Networks EBITDA to be down year-over-year. Trying to think of the bridge here because you do have the memory cost related headwinds. You do have -- it seems like you're assuming for the rest of the year, software doesn't repeat to be as much of a driver as last year. So maybe if you can help me bridge through the EBITDA decline, which at least in my numbers is more around sort of $15 million looks like in EBITDA. How to think about the moving pieces there? How much are you getting from growth in the business offset by these drivers in terms of memory and others? Kyle Lorentzen: Yes. So I think if we look at the sort of the drag from last year, you look at the stranded cost for the Aurora business, they take about half of the $30 million that we're talking about. So that's $15 million. We've had a decline in the legacy business that we've talked about. And then we have the memory chip issue, which in the latest forecast, we have it at about $30 million of drag versus last year. That essentially gets offset partially by the growth that we have in the business on the DOCSIS 4.0 upgrade products. So if you take the growth minus the drag with memory chips, the stranded cost and the legacy business decline, that's how you're getting the year-over-year decline overall. Samik Chatterjee: Great. And for my follow-up, I mean, you did mention the opportunities to then use the balance sheet for accretive acquisitions. How are you thinking about technology that would sort of bolster what you already have in the portfolio on the Aurora Network side? What would be sort of more of a target technology that you would look to acquire? And how much dry powder do you want to keep on the balance sheet for like what is the typical size and dry powder you would need to then pursue those ambitions in terms of acquisitions? Charles Treadway: Sure. Thanks, Samik. Look, we're not going to get into any specifics, but I would say that the DOCSIS market is an industry that continues to be fragmented with many small suppliers. And we've talked to our larger customers, and there's a desire for them to work with players of scale. And based on our size and strong balance sheet, we're well positioned to bring that stability. So I would say what we're looking at more for is bolt-on accretive acquisitions that can provide us, as you say, product or customer expansion, and we're going to be working with our large customers to really kind of define that. Operator: Our next question comes from Amit Daryanani with Evercore. Amit Daryanani: I have a couple as well. Maybe the first one, just to kind of get this sorted out. The RUCKUS transaction, it sounds like you want to do the distribution within 60 days of close. Can you just talk about what the tax treatment would be? Is it going to be like a return of capital the way the Amphenol was? Or could this be different? Kyle Lorentzen: Yes. At this point, we'd expect it to be a return of basis. Amit Daryanani: Got it. Perfect. And then Chuck, we really looked at sort of Aurora as kind of a key asset in the company right now. Could you maybe spend a little bit of time talking about what are the different assets within Aurora? I think you have like the DOCSIS 4.0 portfolio that's doing really well for you folks. I think amplifiers and PON does fairly well. But then you have these legacy assets that are sort of declining but higher margins. Can you just talk about what is the framework in terms of how to think about the different assets within the portfolio? How big they are? What is the EBITDA profile for each of them look like? It would be good to just be able to level set what's left in the asset right now. Kyle Lorentzen: Yes. I mean, maybe I can answer the question just as we think about the legacy business. So clearly, the legacy business has been in decline over the last few years. We talked about the decline that we've seen from '25 to '26 in our forecasting. So a lot of that decline is behind us. And when you think about the Aurora business, approximately 15% of our revenue and about 25% of our EBITDA is driven by that legacy previous DOCSIS version. So as we sort of move off of '26, and Chuck can provide some detail on the different products, you should think about it as we are getting strong growth in those DOCSIS 4.0 products, the new products, the amplifiers, the RPDs, the nodes, and we expect to see continued decline in the legacy business. But on a relative basis, as we've gone through the decline over the last few years, it is a smaller part of our business now. And we're actually seeing fairly strong growth in the DOCSIS products, particularly on the amplifier side, both from an FDX perspective and an ESD perspective. I don't know if... Charles Treadway: Yes. And related to technology, right, on the legacy, think about the E6000 family and the amplifiers there. But as you say, you know the DOCSIS 4.0 stuff. But besides that, I would say PON, specifically remote OLT technology is where we have a good position, and we're going to be looking more at chassis PON going forward. And then on the video side, we also have -- think about our video as software providing, helping cable operators provide ad-based revenue streams for them. Amit Daryanani: Perfect. The last one, I'll step away after this. The backlog, normally full scale, even $843 million. I apologize if I missed this, but is there a way to split that between RUCKUS and Aurora just so we understand what the base looks like? Kyle Lorentzen: Yes. I think the backlog in Aurora is about $400 million, if that's the question. Operator: Our next question comes from George Notter with Wolfe Research. George Notter: I guess, again, a few more questions on the Aurora business. I'm just curious about what customer concentration looks like there. Obviously, there's a couple of big customers, I presume, but I'm just curious what that would look like. And then also bigger picture, these customers are going through a really significant network upgrade. If you look at sort of the pacing of those upgrades, you've got a couple of years left, it feels like, maybe a bit longer, maybe a bit shorter. But how do you think about the business in the context of these upgrades? And then presumably behind that, there's a step down in those business lines. I'm just curious how you think about that? And does this turn into a maintenance business? How big could that maintenance revenue stream be? Like how do you see the long term? Kyle Lorentzen: Yes. So I'll deal with customer concentration, not unsimilar to the other players in the market. Customer concentration is relatively high. Our top 3 customers represent about 75% of our revenue. George Notter: And then the long-term picture? Charles Treadway: Yes, yes. I'll take the second part. When you think about where we are, you say 2 years, it depends really on which customer you are. I mean some customers are probably in that process where they have a couple of years left. Others may have 3 to 5 years left of just getting that ramped up. But then you have -- after that, you have the whole -- the PON story. Customers are either going to go DOCSIS 4.0, they're going to do remote OLT or they're going to do chassis PON going forward. And that's where we're investing in. Of course, video is really unrelated to those things. And then there's going to be a legacy business that continues. So when you think about the value going forward, I mean, there's going to be significant FDX amplifiers. We talked about putting out 500,000 of them already. There's multiple years left, let's say, 3 to 5 years left of that. Operator: [Operator Instructions] Our next question comes from Tal Liani with Bank of America. Kevin Niederpruem: This is Kevin Niederpruem on for Tal Liani with Bank of America. My first question is revolving around these nodes that you guys announced that you plan to ship in the second half of 2026. Can you help us think about the size of this opportunity? And maybe explain for us how you see these nodes coinciding with the purchasing plans of your customers that have already done their strong upgrades with these amplifiers. Is there a relationship and kind of a way to think about it, how these amplifiers that have seen strong growth coincide with the growth of these nodes that are now coming online? Charles Treadway: Yes. I'd start by saying the new product you're talking about is unified RPD nodes and RPDs and nodes, and that allows the customer to choose either ESD option or FDX option. So when you think about Comcast, they're an FDX path other players have chosen ESD. But as they go forward, as they move forward, they see the value of both, and they want to have that optionality. So it will really be a customer that might have already started ESD, they may decide to replace that with a unified product that allows them to have both options. If you're already with FDX and you're choosing that, you might not go that route. When you think about amplifiers in a relationship to the number of nodes, I mean, think about 6 to 8 amplifiers per node is kind of how to think about that. It could range from 4 to 8, depends on how you design your network. Kevin Niederpruem: Got it. Makes sense. And then my second question for you guys is, last quarter, you talked about how you have visibility into memory supply and you're almost kind of reengineering or reworking these products to help mitigate the impact of memory costs. Can you talk about where you stand today? How does your line of sight look to inventory now? And how is that reengineering or reworking progressed throughout the quarter? Charles Treadway: Right. I'd say with the RUCKUS business, we actually have all the volume we need for '26 right now. But as I want to mention, as we talked about in the last call, RUCKUS requires a different graded chip. It's not the high end -- the really -- heat since -- it's more -- it cannot -- it doesn't have to worry about the heat as much as it does in the Aurora product. On the Aurora side, we're like most companies that are dealing with the tight supply. But I'd say in the first quarter, we managed -- we managed through the challenges. We delivered the strong results. And then we're working with our suppliers and customers on availability and pricing. The good thing for us is we've had orders on the books for multiple years now. And the suppliers are looking at that very favorably because we're not raising the volume to make sure we get a larger allocation. We've been very consistent on that. And they've been very supportive in helping us up to this point. And I say that they're going to most likely continue to be able to do that for us. And we also -- as you say, we are working on designs. I'd say we're a couple of quarters away from having some additional options related to memory chips, but that's where we are there. But I feel good right now about how we've been treated. We've been supported and the fact that we're not AI is helping us in this case. Operator: Our next question comes from Tim Savageaux with Northland Capital Markets. Timothy Savageaux: Congrats on the RUCKUS sale. I want to take kind of the flip side of the legacy question. And that is, I don't know if you'd look at sort of a growth aspect of Aurora and call that vCCAP and PON or do I ask the same type of questions. As we look at that business now, how -- I imagine it's small, but I wonder if you could try and size that in a similar way or talk about growth potential and a target for that business over time? Can it become, say, as big as the legacy business in a few years? And I have a follow-up. Kyle Lorentzen: Yes. So let me -- I mean, I'll just talk a little bit about just the size of the PON and vCMTS business as it sits today in our Aurora business. Think about that as less than 10% of the revenue. And as Chuck mentioned, with the focus on the PON side and on the vCMTS side, where we've announced some wins, particularly in Europe, yes, we would expect that business to grow fairly substantially over the next 3 to 4 years. And we feel like there is some line of sight for us to be able to at least offset our legacy business with those 2 product lines. So I think we're not going to go roll out the detailed forecast by product line. But I think as we think about what I mentioned before on that 15% of our legacy business with PON and vCMTS being less than 10%, yes, we think over the next few years, we can get it to be that size. And when you think about our DOCSIS 4.0 products, the amplifiers and the RPDs in particular, I mean, we are seeing our projection within our forecast is to see those products year-over-year from '25 to '26 to grow in the 20% range. So I mean, there is strong growth on that side of the business. Charles Treadway: And the other thing I could add to that, Tal, is more in line with the inorganic opportunities. As I shared earlier in the call, with speaking to our large customers, there are opportunities for consolidators that could get us some additional product lines, that these customers may need that we don't have today as well as additional customers that we don't have today. And obviously, we'd be looking at not just products we could use right now, but products that we could use for the future. Timothy Savageaux: Great. And if I could follow up with that 20% growth in amplifiers and nodes and offset by legacy declines, does that translate into maybe double-digit revenue growth for Aurora in '26 despite the EBITDA decline? And that's it for me. Kyle Lorentzen: Yes, you're probably somewhere in the low double digits. Operator: Thank you. I'm showing no further questions at this time. I would now like to turn it back to Chuck Treadway for closing remarks. Charles Treadway: Yes. Thank you for your time today. And obviously, we appreciate the interest in our company, and have a great rest of your week. Thank you very much. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Vistance (VISN) Q1 2026 Earnings Transcript was originally published by The Motley Fool

Vistance Networks, Inc. VISN reported strong first-quarter 2026 results, with adjusted earnings of 34 cents per share surpassing the Zacks Consensus Estimate of 22 cents by 54.6%. Revenue of $471.8 million also topped the consensus mark of $448 million by 5.2%. Results were driven by higher net sales across both remaining operating segments, led by Aurora. A key profitability marker also improved, as non-GAAP adjusted EBITDA margin expanded to 18.5% in the quarter. Vistance Networks, Inc. price-consensus-eps-surprise-chart | Vistance Networks, Inc. Quote VISN’s net sales from continuing operations increased 21.6% year over year to $471.8 million, reflecting higher sales in both Aurora and RUCKUS segments. The segment performance skewed heavily toward Aurora, where net sales jumped 32.6% to $298.4 million, supported by increases in the Access Technologies business. RUCKUS revenue was also positive, rising 6.3% year over year to $173.4 million. Management attributed the improvement to stronger demand and investments in selling resources, while core RUCKUS sales (excluding OneCell, which was sold in May 2025) advanced 13.7% versus the year-ago period. Strength was broad-based by region, with the United States remaining the largest market and registering a 24.1% year-over-year increase in revenues to $327.7 million. Europe, the Middle East and Africa rose 36.4% to $72.3 million, while Asia Pacific climbed 50.7% to $42.8 million, signaling solid momentum outside VISN’s home market. Still, results were not uniformly strong. Caribbean and Latin America revenue fell 24.2% to $14.4 million, and Canada declined 38.1% to $14.6 million. Even with these pockets of weakness, the company posted overall top-line growth as the larger regions offset the declines. Operating income from continuing operations came in at $23.7 million compared with an operating loss of $16.3 million in the prior-year quarter. Segment-level operating income improved in both businesses, with Aurora moving to $15.0 million from a loss position a year ago, while RUCKUS operating income rose to $8.7 million from $7.0 million. Gross profit increased to $233.7 million from $197.6 million on the higher revenue base, while the company reported an adjusted gross profit rate of 49.6% for the quarter. This margin level, paired with management’s commentary on favorable mix and product redesign benefits, points to better efficiency despite ongoing business changes. Selling, general and administrative costs were $109.2 million, while research and development expense was $58.2 million. VISN continues to balance investment spending with cost actions, including restructuring activity, as it positions the remaining operations around Aurora and prepares for further portfolio changes. VISN used $226.6 million of cash in operating activities during the first quarter, and free cash flow was a use of $228.8 million after $2.2 million of capital expenditures. The company tied the seasonal cash use to working capital needs and annual incentive payouts. A major strategic headline accompanied the quarter: VISN entered a definitive agreement to sell its RUCKUS Networks business to Belden for $1.846 billion, with closing expected in the second half of 2026. The company said it expects to use most of the proceeds for a cash distribution within 60 days of closing, with exact timing and size to be determined by the board. Balance sheet positioning has also shifted materially following the CCS sale completed earlier in the year. VISN ended the quarter with $2.51 billion in cash and cash equivalents and no long-term debt, and the board approved a $100 million share repurchase program. Management also reiterated full-year 2026 adjusted EBITDA guideposts of $350-$400 million, while indicating Aurora’s standalone adjusted EBITDA is expected to be $225-$250 million. Vistance currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Arista Networks Inc. ANET is scheduled to release first-quarter 2026 earnings on May 5. The Zacks Consensus Estimate for earnings is pegged at 81 cents per share, suggesting a growth of 24.6% from the year-ago reported figure. Arista has a long-term earnings growth expectation of 17.9%. Arista delivered an average earnings surprise of 9% in the last four reported quarters. Akamai Technologies, Inc. AKAM is slated to release first-quarter 2026 earnings on May 7. The Zacks Consensus Estimate for earnings is pegged at $1.61 per share, indicating a 5.3% decline from the year-ago reported figure. Akamai has a long-term earnings growth expectation of 7%. Akamai delivered an average earnings surprise of 9.4% in the last four reported quarters. Pinterest, Inc. PINS is set to release first-quarter 2026 earnings on May 4. The Zacks Consensus Estimate for earnings is pegged at 22 cents per share, implying a fall of 4.3% from the year-ago reported figure. Pinterest has a long-term earnings growth expectation of 24.5%. Pinterest delivered an average negative earnings surprise of 3.6% in the last four reported quarters. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Akamai Technologies, Inc. (AKAM) : Free Stock Analysis Report Vistance Networks, Inc. (VISN) : Free Stock Analysis Report Arista Networks, Inc. (ANET) : Free Stock Analysis Report Pinterest, Inc. (PINS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

(Bloomberg) -- Apple Inc. reports quarterly earnings after the close on Thursday, but investors will be largely looking past the numbers and seeking clues to incoming Chief Executive Officer John Ternus’ strategic plans. Most Read from Bloomberg US Seeks to Deploy Hypersonic Missile for the First Time Against Iran North Korea Confirms Suicide Rule for Soldiers Ukraine Captures Two NJ Malls Separated by Just Four Miles — and Very Different Fates Junior Bankers Sick of Grunt Work Build $2 Billion AI Tool to Do the Job Meta Shares Plunge on Rising Concern About AI Spending Spree The iPhone maker announced last week that Ternus, its current head of hardware infrastructure, will take over for CEO Tim Cook on Sept. 1. That makes Apple’s fiscal second-quarter earnings report, outlook and conference call the first significant opportunity for Wall Street to get a reading on the new leader’s priorities. It isn’t clear if Ternus will appear on the call, and a company spokesperson declined to comment. “It isn’t really about the numbers,” said Anthony Saglimbene, chief market strategist at Ameriprise. “We want to know what the CEO transition looks like.” Ternus is taking over at a complex time for one of the world’s biggest companies, which is expected to debut a number of major products in upcoming months — notably a foldable iPhone. But while growth trends are improving, Apple has been grappling with skyrocketing costs for key components like memory chips and a volatile macro backdrop driven by the war in Iran and advances in AI that have minted stock market winners and losers. “Investors have reason to be excited about Ternus since he was an overseer of some of Apple’s most successful recent products, but his strategy will be a long-term story,” said David Wagner, portfolio manager at Aptus Capital Advisors, which has about $14 billion in assets and holds Apple in a variety of portfolios. “In the short term, the impact of component costs will be the focal point.” Apple shares are up less than 1% this year after a relatively disappointing 8.6% gain in 2025. By contrast, the technology-heavy Nasdaq 100 Index is up 8.3% in 2026 and the S&P 500 Index has gained 4.9%. Apple’s stock was up 1.2% on Thursday afternoon. While the company is accelerating development of AI-powered hardware devices and features, it has also seen a number of delays with its own artificial intelligence products. However, Apple hasn’t followed its megacap peers in sinking tens of billions of dollars into building out AI infrastructure, which has diminished the stock’s correlation to the rest of the tech industry. Earnings from the four biggest spenders — Alphabet Inc., Amazon.com Inc., Meta Platforms Inc. and Microsoft Corp. — after the bell on Wednesday offered a mixed bag on that theme. For example, Meta shares were punished in extended trading after the Facebook parent raised its expectations for capital expenditures in 2026. Meanwhile Alphabet’s stock jumped as its cloud computing unit reported strong growth, signaling that its AI investments are starting to pay off. Wall Street expects Apple to report 19% earnings growth on a 15% jump in revenue, according to data compiled by Bloomberg. For the fiscal year, which closes at the end of September, analysts anticipate that revenue will climb 12%, nearly twice last year’s 6.4% pace and the fastest rate since 2021. However, that still trails the tech sector, which is expected to post revenue growth of more than 26% in 2026, according to Bloomberg Intelligence data. The relatively slow expansion has made Apple’s stock more expensive. The shares trade at nearly 30 times estimated earnings, a sizable premium to their 10-year average of roughly 23. That gives Apple the second-highest valuation among the Magnificent Seven group of tech giants, trailing only Tesla Inc. and its nosebleed multiple of more than 180 times forward earnings. “Apple is a quality name, which warrants a premium, but it continues to look pretty expensive relative to its growth,” said Matt Stucky, chief portfolio manager of equities at Northwestern Mutual Wealth Management Company, which manages around $5 billion. This setup could put more pressure on Ternus to chart a path to stronger long-term growth, according to Stucky. “If innovation from the new CEO can provide that, then there’s reason to be optimistic about Apple from here, and that optimism could keep the multiple strong or even push it higher,” he said. “Right now, we don’t know what that growth catalyst could be. If the strategy is more about grinding out market-share gains, keeping products refreshed, that would be good but not game-changing.” The soaring cost of memory chips is one of the biggest factors in the company’s outlook. Memory is a major part of the buildout of artificial intelligence infrastructure, and the aggressive spending on AI has created a supply crunch. An index of spot prices for dynamic random-access memory, or DRAM, chips has risen more than 500% since the end of August. That said, Apple is better positioned to absorb higher costs than many of its rivals due to its size and balance-sheet strength. For example, it recently rolled out a less expensive version of the MacBook designed to improve the company’s market share in lower-end laptops. However, the longer memory prices stay elevated the more the impact is expected to spread, potentially hitting Apple’s bottom line. “The stocks that have been hit the hardest are the ones that show some kind of margin degradation,” Aptus Capital’s Wagner said. “So if the memory headwind sticks around, it will start to become a margin risk for Apple. And given the valuation, there’s more room to the downside.” Tech Chart of the Day Top Tech Stories A frenzied day of earnings reports offered a glimpse at how some of the world’s biggest tech companies are doing in artificial intelligence. The upshot: Alphabet Inc.’s Google is seeing a clear payoff from its AI spending, while Meta Platforms Inc. is lagging behind. Alphabet reported high demand for its cloud and artificial intelligence offerings, boosting shares and giving investors confidence that its unprecedented investments in AI infrastructure will pay off. Meta Chief Executive Officer Mark Zuckerberg reignited fears that the historic levels of investment he’s making to catch up in the artificial intelligence race won’t pay off, a prospect that sent shares sliding after the company raised its spending outlook for the year. Amazon.com Inc. is spending at a rapid rate to expand data center capacity to meet the intense demand for artificial intelligence computing power, fueling the fastest quarterly sales growth for its cloud unit in more than three years. Microsoft Corp. said cloud computing revenue and spending on AI infrastructure will accelerate this year, a bid to convince investors that its huge bets on artificial intelligence are poised to pay off. Qualcomm Inc. rallied in premarket trading after the company said it was making headway in the lucrative data center market and predicted that the China phone industry would bounce back. Anthropic PBC has begun weighing a fresh funding round that would value the artificial intelligence developer at more than $900 billion, according to people familiar with the matter, potentially leapfrogging its longtime rival OpenAI as the world’s most valuable AI startup. OpenAI has met a key milestone for securing AI capacity in the US several years ahead of schedule, boosting the startup’s ambitious plans for data center expansion. Earnings Due Thursday Earnings Premarket: Asure Software Inc. (ASUR US) Bandwidth Inc. (BAND US) Cable One Inc. (CABO US) Diebold Nixdorf Inc. (DBD US) Entegris Inc. (ENTG US) InterDigital Inc. (IDCC US) L3Harris Technologies Inc. (LHX US) Silicom Ltd. (SILC US) Vistance Networks Inc. (VISN US) Earnings Postmarket: Cohu Inc. (COHU US) Apple Inc. (AAPL US) Axt Inc. (AXTI US) Dolby Laboratories Inc. (DLB US) Five9 Inc. (FIVN US) GoDaddy Inc. (GDDY US) Grid Dynamics Holdings Inc. (GDYN US) Monolithic Power Systems Inc. (MPWR US) OneSpan Inc. (OSPN US) Rimini Street Inc. (RMNI US) Riot Platforms Inc. (RIOT US) SPS Commerce Inc. (SPSC US) Twilio Inc. (TWLO US) Universal Display Corp. (OLED US) Western Digital Corp. (WDC US) --With assistance from Subrat Patnaik, Neil Campling and David Watkins. (Updates to afternoon trading.) Most Read from Bloomberg Businessweek ‘I Have Half of MAGA’: The Republican Challenging Trump From Within Running America’s Second-Busiest Airport in Turbulent Times It’s Boating Season, But Only If You Can Afford Fuel United’s CEO Is Here to Buy Your Struggling Airline Outrage Over Pesticides Is Alienating Some Trump Voters ©2026 Bloomberg L.P.

Record sales growth of 58% was underpinned by a 33% organic increase, reflecting broad-based demand across nearly all served markets. The IT datacom segment reached 41% of total sales, driven by an 81% organic surge in AI-related interconnect demand and next-generation architecture build-outs. Management attributes the 380 basis point year-over-year adjusted operating margin expansion to robust operating leverage on higher volumes, which successfully offset the dilutive impact of the CommScope acquisition. The CommScope acquisition, closed in January, is performing ahead of initial expectations, with growth rates largely mirroring Amphenol's organic pace in its first quarter of integration. Defense and industrial markets showed significant acceleration, with defense growing 25% organically due to a structural shift in global geopolitical investments and next-generation technology upgrades. The company's decentralized entrepreneurial model is credited for the agility required to scale production rapidly, meeting a record book-to-bill ratio of 1.24:1. Q2 guidance anticipates sequential sales growth in IT datacom in the low teens, supported by accelerating AI data center investments and a recovery in traditional enterprise demand. Defense sales are projected to increase in the high single-digit range sequentially as countries continue to upgrade smart munitions and missile defense systems. The adjusted effective tax rate is expected to remain at 27% for the remainder of 2026, reflecting a shift in income to higher-tax jurisdictions and recent tax determinations in China. Management expects quarterly interest expense, net of interest income, to be approximately $200 million for the rest of the year following the financing of recent acquisitions. The company maintains a strategy of 'interconnect neutrality,' positioning itself to benefit from any architectural shift between copper and optical solutions in AI ecosystems. Recorded a $130 million tax accrual and a $160 million additional tax provision following unfavorable determinations from Chinese tax authorities regarding prior period inquiries. Incurred $249 million in acquisition-related costs, primarily non-cash amortization of acquired backlog and inventory step-up related to the CommScope transaction. Management noted areas of demand uncertainty in the automotive market, particularly in Asia, though North American and European organic growth remained positive. The company highlighted its increased capital expenditure as a necessary response to doubling its sales run rate over a two-year period to support AI capacity requirements. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management emphasized that they offer the industry's broadest suite of high-speed copper, power, and optical products, making them indifferent to specific architectural winners. Regardless of the shift to CPO or silicon photonics, customers are demanding more total interconnect density, which increases Amphenol's content per system. While not using traditional long-term supply agreements, management is securing 'commitments' and investment participation from hyperscalers to justify massive automation and capacity increases. The company's agility and proven execution during 100%+ growth cycles have made them a preferred partner for customers looking to avoid supply chain bottlenecks. The acquisition provides a unique entry into the 'building connectivity' and smart factory markets through CommScope's established distribution channel in over 150 countries. Amphenol plans to pull its existing antenna and sensor products through these new commercial building channels to drive '1 plus 1 equals 3' revenue synergies. Management acknowledged healthy competition in optics but noted that their execution capability is as valued by customers as the underlying technology. They intend to apply the same aggressive execution strategy that led to their dominant share in copper-based AI scale-up to the optical market. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.