Vistance Networks — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales decreased 5.4% year-over-year to $319.7 million in Q3 2026, compared to $337.8 million in Q3 2025.
• GAAP income from continuing operations was $54.7 million ($0.24 per diluted share), a reversal from a loss of $18.9 million ($0.16 per diluted share) in the prior year period.
• Non-GAAP adjusted EBITDA increased 128.2% to $56.6 million, up from $24.8 million in Q3 2025.
• Aurora segment operating income decreased 9.8% to $23.0 million, compared to $25.5 million in Q3 2025.
• Aurora non-GAAP adjusted EBITDA increased 5.0% to $56.8 million, compared to $54.1 million in Q3 2025; margin improved to 17.8% from 16.0%.
• Non-GAAP adjusted net income was $53.0 million ($0.23 per diluted share), up from $17.7 million ($0.06 per diluted share) in the prior year period.
• Cash flow used in operations was $(57.5) million; free cash flow was $(57.7) million.
• The company ended the quarter with $683.1 million in cash and cash equivalents and total liquidity of approximately $842.0 million.
• The company had no outstanding borrowings under its asset-based revolving credit facility, with $158.9 million available.

Guidance and Future Outlook:

• Full-year adjusted EBITDA guidance for Aurora has been revised to $180 million to $200 million, down from previous expectations, primarily due to customer demand being pushed out into 2027.
• Management expects underlying demand for products to remain strong and is focused on managing costs and maintaining financial flexibility.
• Aurora orders increased 41% year-over-year, while backlog totaled $410 million, up 3% compared to the prior year period.

Business Segments and Product Lines:

• The Aurora segment represents substantially all net sales and excludes general corporate costs previously allocated to divested RUCKUS and CCS segments.
• Aurora net sales decreased 5.3% year-over-year, driven by a decline in the legacy business, partially offset by growth in the Access Technologies business.
• Sales performance varied by region: United States sales decreased 7.9%, Caribbean and Latin America decreased 36.8%, and Canada decreased 24.5%. Conversely, EMEA sales increased 75.0% and Asia Pacific sales increased 11.4%.
• Business progress includes ongoing DOCSIS 4.0 deployments and adoption of next-generation intelligent amplifiers.
• Transition service agreement income was $7.6 million for the quarter.

Market and Competitive Landscape:

• Near-term performance is impacted by memory chip pressures and customer deployment timing.
• The company remains confident in long-term demand and opportunities to expand its portfolio.
• The company faces risks related to the cost and availability of key components, including memory chips, and the ability to implement price increases.

Risks and Challenges:

• Risks include dependence on customer capital spending, potential economic downturns, inflation, and concentration of sales among limited customers.
• Challenges involve supply chain dependencies, manufacturing capacity realignment, and potential restructuring actions.
• The company faces risks related to cybersecurity, international operations, foreign exchange rates, and regulatory compliance.

Management Commentary and Tone:

• Chuck Treadway, President and CEO, expressed confidence in long-term demand and the company's debt-free balance sheet position.
• Kyle Lorentzen, CFO, noted that memory chip pricing and stranded costs were more than offset by lower variable compensation in the quarter.
• Management highlighted significant value returned to shareholders through divestitures and stock repurchases.

Other Key Points:

• The Board of Directors approved a new share repurchase program authorizing up to $100 million, in addition to $250 million in previously announced authorizations.
• As of October 30, 2026, the company had repurchased $225 million of stock under existing programs.
• The company announced a $1.50 per share special distribution; total distributions to shareholders in 2026 will reach $16.50 per share.
• The company has divested its CCS and RUCKUS businesses, with costs previously allocated to these segments now classified as continuing operations.
• Income from discontinued operations was $975.9 million for the quarter, driven by the gain on disposal of discontinued operations.