Clearfield(US:CLFD)2025-11-25 14:30Financial Data and Key Metrics Changes - In Q4 2025, net sales from continuing operations were $41.1 million, up 13% year over year from $36.2 million [4][12] - For the full fiscal year, net sales from continuing operations grew 20% to $150 million from $125.6 million in fiscal 2024 [4][14] - Gross margin improved from 26.6% to 34.6% in Q4 2025, driven by better manufacturing efficiencies [12] - Net income per share from continuing operations was $0.13 in Q4 2025, compared to a loss of $0.01 per share in the same period last year [12] Business Line Data and Key Metrics Changes - The divestiture of the Nestor Cables business allows the company to focus on core North American operations and higher return opportunities [5][11] - The community broadband segment showed flat performance year over year, impacted by the government shutdown and delays in the BEAD program [22][23] Market Data and Key Metrics Changes - The company reported that 18 of the 52 submitted proposals for the BEAD program were approved, indicating a positive outlook for fiber deployment [10] - The company anticipates that the late start to the BEAD program and the recent government shutdown will pressure investments in the community broadband market early in the year [16] Company Strategy and Development Direction - The company is focused on its "Better Broadband and Beyond" strategy, which includes protecting its core community broadband business and expanding into new applications [7][11] - New product lines, including splice cases and next-generation fiber management cassettes, are set to launch in early 2026, aimed at enhancing customer engagement and market reach [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to normal operations by Q2 2026 following the government shutdown's impact on bookings [20][21] - The company expects net sales from continuing operations in fiscal 2026 to range between $160 million and $170 million, driven by steady demand for fiber connectivity [15][16] Other Important Information - The company ended the quarter with approximately $166 million in cash and investments, reflecting a strong balance sheet [15] - The board of directors increased the share buyback authorization from $65 million to $85 million, allowing for additional repurchases [15] Q&A Session Summary Question: Impact of government shutdown on revenue and bookings - Management noted that the government shutdown affected bookings across various programs, particularly ACAM, leading to a soft outlook for Q1 [18][19] Question: Timeline for normalization post-shutdown - Management expects operations to normalize by Q2 2026, despite the initial impact on bookings [20][21] Question: Community broadband performance in Q4 - Community broadband was flat year over year, primarily affected by the government shutdown and delays in the BEAD program [22] Question: Gross margin outlook - Management indicated that gross margin improvements are expected to be volume-dependent, with modest improvements anticipated as revenue increases [24] Question: Industry fiber supply concerns - Management acknowledged ongoing concerns regarding fiber supply due to high demand from data centers, affecting allocations from suppliers like Corning [25] Question: Nestor's revenue contribution - Nestor's revenue for the fourth quarter was $9.4 million, with Clearfield's revenue at $41.1 million, totaling approximately $50.4 million [30] Question: Annual outlook and BEAD program impact - Management indicated that the annual forecast includes limited revenue from new product introductions, with expectations for BEAD-related revenue to be less than $10 million [35][37] Question: Addressable market expansion with new products - The next-generation cassette line is expected to attract new customers and transform existing customer relationships, particularly in non-hyperscale data centers [39]