Clearfield — Fiscal 2026 Earnings Summary

Financial Performance:

• Full-year fiscal 2026 net sales from continuing operations were $151.9 million, a 1% increase from $150.1 million in fiscal 2025; Q4 2026 net sales were $39.3 million, a 4% decrease from $41.1 million in Q4 2025.
• Full-year gross margin from continuing operations was 32.0%, down from 33.7% in fiscal 2025; Q4 2026 gross margin was 30.7%, down from 34.6% in Q4 2025.
• Net income from continuing operations for fiscal 2026 was $2.1 million ($0.16 per diluted share), down from $6.3 million ($0.45 per diluted share) in fiscal 2025; Q4 2026 net loss from continuing operations was $73,000 ($0.00 per diluted share), compared to net income of $1.8 million ($0.13 per diluted share) in Q4 2025.
• Operating expenses for fiscal 2026 were $50.9 million (33.5% of net sales), up 5% from $48.4 million (32.3% of net sales) in fiscal 2025; Q4 2026 operating expenses were $13.1 million (33.3% of net sales).
• The company generated approximately $41 million in cumulative free cash flow over the past three fiscal years.
• As of September 30, 2026, the company held $157 million in cash and investments with no debt.
• Sales order backlog increased 75% to $43.3 million as of the end of fiscal 2026, compared to $24.7 million at the end of the prior fiscal year.
• The company repurchased approximately 60,000 shares for $1.8 million during Q4 2026, with $13.2 million remaining for future repurchases as of September 30, 2026.

Guidance and Future Outlook:

• Full-year fiscal 2027 revenue is expected to range from $195 million to $205 million, representing just over 30% growth from fiscal 2026 revenue at the midpoint.
• Fiscal 2027 net income per share is expected to range from $0.25 to $0.46.
• First quarter fiscal 2027 net sales are expected to range from $48 million to $52 million.
• First quarter fiscal 2027 net income (loss) per share is expected to range from $(0.06) to $0.03.
• Guidance assumes operating expenses as a percentage of net sales will remain consistent with Q4 2026 levels.
• Outlook reflects expectations regarding the data center environment, potential supply chain constraints for optical fiber, cable, and connectors, and the evolving tariff situation.

Business Segments and Product Lines:

• Fiscal 2026 performance reflected growth in the Large Regional segment, partly offset by softness in the MSO market.
• The company began shipments against a previously announced $22 million data center order, marking a milestone in data center business expansion.
• Clearfield announced shipments to one of the first BEAD funded deployments in Minnesota.
• The company is expanding fiber management expertise into the rapidly growing AI infrastructure market.

Market and Competitive Landscape:

• The company serves telecom, data center, and network infrastructure environments, including community broadband providers, MSOs, incumbent service providers, ISPs, data centers, wireless providers, IoT networks, the military, municipalities, and cooperatives.
• Clearfield deploys more than a million fiber ports each year.
• Management anticipates a gradual recovery in broadband demand for fiscal 2027.

Risks and Challenges:

• Risks include supply chain disruptions, reliance on single-source suppliers, and potential delays or cost increases.
• Trade policy changes, including tariffs and trade disputes, may adversely affect business and results of operations.
• Inflationary price pressures and uncertain availability of components, raw materials, labor, and logistics could negatively impact profitability.
• A significant percentage of sales have historically been made to a small number of customers; loss of major customers or further customer consolidation could adversely affect the business.
• Product defects, cyber-security incidents, and adverse global economic conditions pose potential risks.
• The business is dependent on capital spending by broadband service providers and government funding programs like BEAD and RDOF.

Management Commentary and Tone:

• CEO Cheri Beranek described fiscal 2026 as a "pivotal transition year" and expressed confidence in the company's next phase of growth under new leadership.
• Cheri Beranek announced plans to retire effective March 31, 2027, or earlier upon the appointment of a successor, and will continue as President and CEO Emeritus.
• CFO Dan Herzog highlighted strengthened financial position through disciplined balance sheet management and strong cash generation.
• Management noted positive signs in the broadband market and significant growth opportunities in the data center sector.

Other Key Points:

• The company has no debt and maintains a strong balance sheet with $157 million in cash and investments.
• Over the past three fiscal years, the company returned $65 million to shareholders through share repurchases.
• A conference call was held on November 10, 2026, to discuss results and business conditions.
• The company continues to leverage its "labor lite, craft-friendly" platform for fiber connectivity solutions.