Conferencia de resultados del 3T 2026 de Vistance Networks (VISN): Recorte de previsiones de EBITDA

Puntos clave

• Las ventas netas del tercer trimestre de 2026 se situaron en 320 millones de dólares, lo que supone un descenso interanual de 18 millones de dólares, o del 5%, ya que el aumento de los envíos de DOCSIS 4.0 se vio compensado por las menores ventas de productos heredados.
• El EBITDA ajustado fue de 57 millones de dólares. El EBITDA ajustado del segmento Aurora Networks aumentó un 5%, impulsado por una menor compensación variable, mientras que el EBITDA ajustado de las operaciones continuadas creció un 128% bajo la presentación de costes compartidos conforme a la normativa GAAP de EE. UU.
• Vistance Networks redujo su previsión de EBITDA ajustado para todo el año a entre 180 y 200 millones de dólares, debido al aumento de los costes de memoria y a que los clientes retrasaron sus pedidos de amplificadores al gestionar sus inventarios y calendarios de despliegue.
• El ritmo de pedidos de Aurora aumentó un 41% interanual, mientras que la cartera de pedidos alcanzó los 410 millones de dólares, una subida del 3%. La dirección indicó que la demanda subyacente de modernización sigue intacta, aunque los plazos de compra podrían continuar siendo volátiles.
• La empresa prevé retornar aproximadamente 4.000 millones de dólares a los accionistas en 2026. Las distribuciones extraordinarias totalizarán 16,50 dólares por acción, mientras que se habían recomprado 28,9 millones de acciones por 225 millones de dólares hasta el 30 de octubre.
• El presidente y director ejecutivo Charles Treadway dejará su cargo el 1 de febrero. La compañía ha iniciado un proceso de sucesión y comunicó que Treadway permanecerá centrado en la ejecución y en una transición ordenada.

Datos financieros clave

Rendimiento empresarial y operativo

DOCSIS 4.0 siguió siendo el principal motor de crecimiento. Vistance Networks informó de avances continuos en amplificadores inteligentes, nodos y productos CMTS virtuales. Su despliegue de FDX con Comcast continuó, mientras que los amplificadores ESD de última generación se enviaban a múltiples grandes MSO de Norteamérica. La dirección prevé que los envíos de ESD se aceleren en 2027.

Aurora Networks también anunció un despliegue a gran escala de nodos Unified DOCSIS 4.0 con Ziggo. La arquitectura combina la plataforma de nodos ópticos de Aurora, el módulo DAA unificado, la plataforma de núcleo virtualizado vCCAP Evo y el gestor de dominios ServAssure NXT. La empresa también aseguró un despliegue de vCCAP Evo con O2 programado para implementarse a lo largo de tres años.

Los chips de memoria siguieron representando una notable presión sobre los costes. La dirección estimó el impacto para 2026 en aproximadamente 40 millones de dólares, y parte de esa presión se trasladará a 2027. La compañía está negociando precios con los clientes, colaborando con proveedores y desarrollando diseños alternativos.

Vistance Networks también está desarrollando su cartera de productos PON, incluidos 50G PON y Telco PON. Se prevé que su negocio de seguridad PKI genere unos 10 millones de dólares en ingresos en 2026. La dirección calcula un mercado direccionable de unos 700 millones de dólares para sus productos PKI, con un crecimiento anual aproximado del 15%, y está ultimando una estrategia de inversión para esta división.

Previsiones de la dirección

Vistance Networks redujo su previsión de EBITDA ajustado para todo el año 2026 a entre 180 y 200 millones de dólares. La revisión refleja las presiones de precios y disponibilidad de memorias, así como el aplazamiento a 2027 de parte del gasto de los clientes en amplificadores.

Tras la distribución extraordinaria de noviembre, la dirección prevé un saldo de caja a final de año de entre 275 y 300 millones de dólares. Esta estimación excluye las recompras bajo el programa de recompra recientemente autorizado por 100 millones de dólares e incluye la anticipación a 2026 de una devolución fiscal de 60 millones de dólares. Los 100 millones de dólares restantes de la devolución se esperan en 2027.

La empresa prevé que la mayor parte de los costes varados asociados a las desinversiones de CCS y Ruckus queden eliminados para 2027, y que la totalidad de los costes varados desaparezca para 2028. El impacto de los costes varados en 2026 es de aproximadamente 20 millones de dólares.

Riesgos y factores a vigilar

• Se prevé que los precios de las memorias aumenten de forma gradual durante los próximos trimestres, aunque la dirección espera un ritmo de incremento más lento. Parte del impacto estimado de 40 millones de dólares se extenderá a 2027.
• La concentración de clientes hace que los resultados sean sensibles a las variaciones en los calendarios de compra, los niveles de inventario, la productividad en las instalaciones y los plazos de despliegue.
• El elevado nivel de inventario refleja tanto las condiciones del mercado de memorias como los productos terminados afectados por los aplazamientos de los clientes. La dirección espera una normalización parcial durante el primer semestre de 2027, pero no un retorno completo a los niveles anteriores.
• Los ingresos procedentes de productos heredados continúan disminuyendo, lo que exige que el crecimiento de DOCSIS 4.0 compense dicha presión.
• Los plazos de los despliegues de clientes para 2027 siguen siendo inciertos, y la dirección afirmó que aún era demasiado pronto para ofrecer unas previsiones específicas para dicho año.

Puntos destacados de la sesión de preguntas y respuestas con analistas

La dirección afirmó que la disponibilidad de memoria era manejable actualmente y que el precio constituía el principal problema. Vistance Networks no planea especular comprando un exceso de inventario por adelantado; adquiere entre 1,5 y 2 millones de chips de memoria al año y alinea las compras con la demanda de los clientes.

En cuanto al retraso en los pedidos de los clientes, la dirección calificó la situación como una cuestión de plazos y no de pérdida de demanda. La velocidad de despliegue, la productividad de las cuadrillas, la meteorología y los objetivos de inventario de los clientes pueden influir en los calendarios de compra. La empresa prevé que parte de las operaciones retrasadas se traslade a 2027, pero no facilitó previsiones específicas de EBITDA ni de flujo de caja libre para ese ejercicio.

En relación con el capital de trabajo, la dirección señaló que el inventario vinculado a los pedidos retrasados debería comenzar a normalizarse en el primer semestre de 2027. No obstante, se prevé que las presiones vinculadas a las memorias mantengan el inventario por encima de niveles completamente normalizados.

Treadway declaró que su salida prevista refleja una estructura corporativa más reducida y enfocada tras las desinversiones estratégicas, la amortización de deuda y el rescate de acciones preferentes. Continuará como presidente y director ejecutivo hasta el 1 de febrero mientras el consejo de administración busca al próximo líder.

Transcripción completa de la conferencia sobre resultados

Transcripción completa de la conferencia de resultados

Comentarios de la dirección

Operator

[Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker, Ginny Thompson. Ma'am, please go ahead.

Jenny Thompson

Good morning, and thank you for joining us today to discuss Vistance Networks' 2026 third quarter results. I'm Ginny 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 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 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, Ginny, and good morning, everyone. Thank you for joining our third quarter 2026 earnings call. Before we discuss our results, I'd like to briefly address the announcement made this morning. After 6 years as CEO of CommScope, I will be stepping down as President and CEO on February 1. When I joined CommScope, we had $9 billion of revenue, four large business segments, and 30,000 employees around the world. Today we are a much smaller and much more focused company. It has been a privilege to lead CommScope and Vistance Networks through such an important moment of transformation.

We set out to unlock value for our shareholders, and our team delivered. We completed a series of strategic divestitures, repaid all of our debt, and redeemed all of our preferred equity. I am proud of what this team has accomplished and believe now is the right time to initiate this succession plan to identify a leader for the company's next chapter. My focus is unchanged. I remain committed to executing our plan, serving our customers, and delivering on our commitments, and I will work closely with the Board to ensure a smooth transition.

Now turning to Slide 3, before discussing our third quarter results, I'd like to discuss our recent activity around our use of excess cash resulting from the Ruckus transaction. As indicated on our second quarter earnings call, we expected to have between $700 million and $750 million of cash at year-end. This cash balance reflected the payment of our special distribution of $5 per share in August. Subsequent to the end of last quarter and payment of the $5 per share special distribution, we have implemented two additional actions to utilize a significant portion of our excess cash. The first was our recently announced additional special distribution of $1.50 per share.

This distribution will result in a cash outlay of approximately $300 million and will be paid on November 6. This special distribution, along with the $10 per share distribution in April and the $5 per share special distribution in August, will result in total cash distributions to shareholders of $16.50 per share. As indicated, following the sale of our CCS business, a key objective was to return cash to shareholders, and we believe that $16.50 per share achieves that objective.

In addition to the special cash distributions, during the quarter, the company also announced the Board of Directors authorized a share repurchase of $250 million. I'm pleased to report that through October 30, we have utilized approximately $225 million of that program, resulting in 28.9 million shares repurchased. This is a reduction of approximately 13% of the outstanding shares at the end of the second quarter of 2026, including any shares vested as part of the Ruckus transaction. In addition to the $250 million previously authorized, the Board of Directors has authorized an additional $100 million buyback program, bringing the total authorization to $350 million.

We believe this is a balanced use of our excess cash. Including the November distribution and buybacks completed to date, we will have returned approximately $4 billion to shareholders in 2026. Before any repurchases under the new $100 million authorization, we expect to end the year with $275 million to $300 million of cash. This cash balance and strong balance sheet, along with expected cash generation in future years, positions the company for continued investment in the business and a hedge against future volatility.

Now on to the third quarter results on Slide 4. Vistance Networks delivered net sales of $320 million and adjusted EBITDA of $57 million. Revenue was down 5% year-over-year, and adjusted EBITDA was up 5%. Adjusted EBITDA was slightly higher than our expectations as a result of lower variable compensation in the quarter. Overall, it was a solid quarter as we continue to see DOCSIS 4.0 upgrades and the adoption of our next-generation intelligent amplifiers.

The business continues to be impacted by two major items: memory chips and timing of upgrades for our largest customers. On memory chips, the annual impact is approximately $40 million, of which a portion will roll out next year. We continue to deal with availability and pricing associated with memory chips. In the third quarter, we experienced another memory price increase. Despite the challenges, we continue to work with our suppliers and customers to improve availability and manage costs. In addition, we are also working on alternative designs to minimize the impact of memory supply and demand challenges.

We are also seeing some large customers managing inventory and adjusting the timing of their amplifier orders as they evaluate deployment schedules and inventory positions. Given our customer concentration, changes in purchasing patterns can have a significant impact on near-term results. As certain customers have pushed some spending into 2027, we have revised our full-year adjusted EBITDA guidance to between $180 million and $200 million. We remain confident in the underlying demand for our products, although the timing of certain customer deployments remains uncertain.

The market for DOCSIS 4.0 products continues to expand as we deploy our suite of products, including intelligent amplifiers, nodes, and virtual CMTS. Our FDX deployment with Comcast continues to go well. Also, 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 ESD shipments to ramp up in 2027.

At the SCTE TechExpo last month, we showcased our entire suite of products and solutions that help customers upgrade their networks in the most agile ways possible. On display were DOCSIS 4.0 unified solutions, including the RPDs and intelligent amplifiers. Prior to the show, we jointly announced with Ziggo the first large-scale deployment of Unified DOCSIS 4.0 nodes in a live network.

The full solution combines Aurora's optical node platform, its unified DAA module configured for Remote PHY operation, vCCAP Evo Virtualized Core Platform, and ServAssure NXT Domain Manager. This architecture allows operators to deploy flexible network infrastructure that supports evolving DOCSIS standards while simplifying network upgrades. While Ziggo's deployment is based on DOCSIS 4.0 ESD, the unified module supports both ESD and FDX configurations, providing flexibility for different operator network architectures and future requirements.

For Ziggo, this architecture provides a flexible and scalable foundation to evolve its existing HFC network, supporting greater capacity, reliability, and future customer needs while making use of its existing infrastructure. ServAssure NXT Domain Manager enhances and simplifies management of both Remote PHY and virtual CCAP and introduces network automation capabilities. The deployment highlights Aurora Networks' leadership in next-generation broadband infrastructure and demonstrates the readiness of its DOCSIS 4.0 ecosystem for large-scale commercial operation.

In addition, we were awarded another vCCAP Evo win at O2. This deployment will modernize and upgrade their network to Remote PHY. It will roll out over the next 3 years. As stated before, we believe Aurora is well positioned with decades of knowledge of our customers' ecosystems and a broad array of new products for service providers to continue to take advantage of the latest DOCSIS 4.0 upgrade cycle, as well as expanding their current DOCSIS 3.1 networks. We feel our amplifier position, with millions of installed amplifiers requiring upgrades, is valuable as MSOs require upgrades to stay competitive. In addition, with each intelligent amplifier supporting an average of approximately 20 homes passed, we are well positioned to drive edge compute as our current intelligent amplifier has built-in AI machine learning capabilities.

With the Ruckus transaction complete, we're focused on executing in our core cable business and investing organically in select product lines. Our strategy takes advantage of our position in the HFC network and the need for MSOs to continue to upgrade their networks to stay competitive. While cable is under pressure, our customers have large installed bases that have significant value and will require upgrades well into the future. We believe our products are well positioned to be at the leading edge of current and existing upgrades. In particular, our intelligent amplifiers will be at the forefront of upgrade cycles as cable moves towards 25 gigabits. Our intelligent amplifier portfolio includes the only amplifier in the market with AI machine learning capabilities. In the current and future upgrade cycles, we believe amplifiers will be the largest part of the market, and we are the leader in amplifiers. Although we may see some cyclicality, we're confident in the long-term demand for our products.

In addition to continuing to support the required cable upgrades well into the future, we will continue to develop our PON portfolio of products, including Telco PON. Although it's a competitive market, we believe that our product range, including 50G PON and our technology partnerships, will allow us to win market share. We're also finalizing an investment strategy to take advantage of our industry-leading security solution products, specifically PKI. The PKI products provide end-to-end device security, digital certificate provisioning, and software licensing for IoT devices, smart networks, and digital video systems.

Our current PKI business has been internally focused as we have used PKI in our own products. It only represents approximately $10 million of our overall revenue in 2026. However, we have provisioned over 7 billion device credentials and have more than 40 years of security experience. Based on strategic work we have done, our PKI technology is very competitive, and we believe we can grow this business with focused go-to-market investments. Our estimate of addressable market for our products is approximately $700 million, growing at roughly 15% per year. We see this as an attractive opportunity to create long-term value.

We look forward to socializing more of our strategy over the next few quarters as our strategic plans are finalized. And with that, I'd like to turn things over to Kyle to talk more about our third quarter results.

Kyle Lorentzen

Thank you, Chuck, and good morning, everyone. I'll start with an overview of our third quarter results on Slide 5. For Vistance Networks' continuing operations, net sales ended at $320 million, down $18 million or 5% year-over-year, and adjusted EBITDA was up $32 million or 128% to $57 million. Adjusted EPS for the third quarter was up 283% to $0.23 per share versus $0.06 in the third quarter of 2025. It should be noted that the continuing operations presentation reflects the required U.S. GAAP treatment of shared costs. We believe our segment results provide a better insight into the underlying operating performance of the business.

Turning now to our third quarter segment highlights on Slide 6. Aurora Networks' third quarter net sales of $320 million were down 5% from the prior year as increased shipments of our DOCSIS 4.0 products were offset by a decline in our legacy product sales. Aurora Networks' adjusted EBITDA of $57 million was up $3 million, or 5% from the prior year, driven by considerably lower variable compensation in the current quarter, partially offset by lower legacy product revenues, memory chip pricing, and higher stranded costs.

Our stranded cost impact in 2026 is approximately $20 million. We expect the majority of stranded costs associated with the CCS and Ruckus divestitures to be eliminated by 2027, with all stranded costs eliminated by 2028. Aurora order rates were up 41% in the third quarter of 2026 versus prior year. Aurora backlog ended the third quarter at $410 million, up $11 million or 3% versus the end of the third quarter of 2025. Aurora remains well positioned to take advantage of upgrade cycles while offsetting declines in the legacy business. However, timing of upgrades may be cyclical, driven by large customer concentration and timing of their purchases.

Turning to Slide 7 for an update on cash flow. We ended the quarter with $683 million of cash on hand. As expected in the quarter, cash flow from operations was a use of $57 million and free cash flow was a use of $58 million due to working capital needs. Subsequently, after the end of the third quarter, the Board approved a special distribution of $1.50 per share, or approximately $300 million. The distribution will be paid on November 6 from cash on hand and is expected to be treated as a return of capital for tax purposes. With the latest $1.50 per share special distribution, in total, we will have provided special distributions of $16.50 per share in 2026.

Turning to Slide 8 for an update on our liquidity and capital structure. During the third quarter, our cash and liquidity remained strong. As indicated, we ended the quarter with $683 million in cash on hand. The Board of Directors approved an additional buyback of up to $150 million in August 2026 for a total of $250 million in authorized share repurchases. Through October 30, we purchased 28.9 million shares, totaling $225 million against our buyback authorization. The buybacks equated to approximately 13% of our outstanding shares at the end of the second quarter, including any shares vested as part of the Ruckus transaction.

It should be noted that since repurchases occurred ahead of special distributions, the net amount after adjustments for distributions is approximately $140 million, including all commissions and excise tax. In addition to the previously approved $250 million of buybacks, the Board of Directors has authorized an additional $100 million of buybacks. This brings our total authorized buybacks to $350 million.

The company ended the quarter with no outstanding debt. At the end of the third quarter, the current availability under our existing line of credit was $159 million. Based on our cash on hand, cash flow expectations, and leverage capability, we have ample opportunity to invest in growth and value creation and hedge against volatility. Based on our projections, after the $1.50 per share special distribution, we expect to end 2026 with cash on hand between $275 million and $300 million. This does not include any repurchases under the newly authorized $100 million buyback program.

As a result of making certain tax elections, we were able to accelerate $60 million of the previously announced $160 million tax refund into 2026. This $60 million is reflected in the cash estimate for the end of 2026. We still expect to receive the remaining $100 million in 2027. This provides us with a strong balance sheet, allowing for incremental investment and a hedge against volatility.

I will conclude my prepared remarks with commentary around our expectations for the remainder of 2026. We delivered solid execution in the first 3 quarters. However, memory pricing and availability continues to pressure the business. In addition, certain customers are adjusting the timing of amplifier orders as they manage inventory and deployment schedules. As a result, we are lowering our full-year adjusted EBITDA guidance to $180 million to $200 million. We remain confident in the long-term demand for our products, although customer concentration and deployment timing may continue to drive variability in the near term.

We are very pleased with the return of $16.50 per share in 2026, as well as our buyback program. We feel this represents a proper balance of returning cash to our shareholders as well as investing in future value creation. We look forward to continuing to develop and implement the Vistance Networks strategy focused on taking advantage of continued long-term investment in HFC network, PON, and security solutions. And with that, I'll turn it back to Chuck.

Charles Treadway

Thank you, Kyle. In closing, I'm pleased with our progress this year. We've extinguished all of our long-term debt, redeemed our preferred equity, and returned approximately $4 billion in cash to our shareholders through our special distributions and stock buybacks. Although we are dealing with some short- and medium-term challenges with memory chips and volatility of large customer demand, we are well positioned to take advantage of the DOCSIS 4.0 build over the next several years.

Beyond DOCSIS 4.0, we believe that the cable infrastructure market will continue to require upgrades, and we are currently working with our key customers to develop new products, including next-generation intelligent amplifiers, PON, and PKI security solutions. With that, we'll now open the line up for questions.

Operator

[Operator Instructions] Our first question is going to come from the line of George Notter with Wolfe Research. Please go ahead.

Preguntas y respuestas

George Notter

Chuck, it's been great working with you [ in the ] future going forward. Again, it's been great. All right, my question is on memory pricing. Obviously, there are some real pressures here. I guess I'm just curious about the outlook for 2027 memory pricing. What are you guys seeing? Do you have an ability to offset that memory cost incrementally with surcharges or price increases? What does that look like right now? Thanks a lot.

Charles Treadway

Yes, I would start out by saying I think we're going to see gradual price increases continuing for the next several quarters, but probably not at the same rate as it was—probably a little less, a little flatter, at least that's what we're believing. And in terms of passing costs through, we are working with our customers to push price through there. And obviously, as prices go higher, we're able to push more to them. So, we did call out that the impact would be about $40 million this year to us, with some rolling out next year.

George Notter

Got it. Okay. And then I assume availability is still okay for you guys in terms of memory, or is this just really a pricing impact?

Charles Treadway

I'd agree with that at this point.

George Notter

Okay, cool. And then the customer pushout, I assume this is one of your large customers. Is it related to CapEx pressures? Is it related to component supply? Is it budget-related or project timing? Any more you could tell us on that pushout would be great.

Charles Treadway

I would say it's really more dependent on their deployment schedules and how fast they install, in addition to levels of inventory that they want to hold. Right now, their installation schedules can be impacted by many things. Think about how fast they're installing, productivity of their crews, weather, such like that. I don't really see anything causing them not to do work. It's just how fast they can move. Obviously, we're going to listen to Charter's report tomorrow. We'll learn more from them. But I would say we're working with them on schedules and timing and how they're viewing what's going to be installed.

George Notter

Okay, thanks very much. Good luck.

Charles Treadway

Thank you.

Operator

And our next question will come from the line of Amit Daryanani with Evercore ISI. Please go ahead.

Amit Daryanani

I guess just first off, on the memory pricing, how much are you guys able to buy ahead of some of these price increases? It seems like you guys have been talking about pricing continuing to rise for a couple of quarters here. I guess, you know, you've had some additional cash on hand, just thinking about why not buy a bit more now.

Charles Treadway

Well, we're obviously not going to be speculating on memory. We buy approximately 1.5 million to 2 million—I mean, 1.5 million to 2 million memory chips a year, which is big numbers. So we have to work very closely with the suppliers, very close to the suppliers of that. And we tie it to their demand, not necessarily looking at, hey, we don't want to be holding the bag if the prices go the other way. I would say that, yes.

Amit Daryanani

And Chuck, maybe just touch on, you know, why now are you stepping down, given that it seems like Aurora is now in a good spot to keep operating by itself?

Charles Treadway

Yes, look, I would say the business is just at a much smaller scale than what I took over in 2020. You know, we delivered on the commitments that we made to the Board. I've agreed with the Board that this is just the right time to identify a next leader. It's a more focused business, and I'm going to remain in this role until February 1 and committed to a smooth transition. Thank you, guys.

Operator

And our next question will come from the line of Joseph Cardoso with JPMorgan. Please go ahead.

Joseph Cardoso

This is Mark on for Joseph Cardoso. I guess with regards to the customer pushout commentary, it seems like that's mostly being described as a timing factor rather than a demand factor. So should we expect that that business comes back in '27? I guess, with regards to the '27 outlook itself, do you see that potentially improving EBITDA and free cash flow year-over-year as well?

Charles Treadway

Look, I'd say to your question and in your comment, I do believe the demand is real and it's going to stay, it's just pushed out. And in terms of what are we thinking for '27, I would say we see this as, first of all, because of our concentration of customers, there will be some cyclicality there, but we do believe that they're going to move forward with redoing and upgrading their networks. What we've seen so far is some delays related to inventory adjustments, but I would say that it's really too early to be specific for 2027.

Joseph Cardoso

Got it, got it. And then maybe just to follow up regarding the free cash flow outlook, as we think about the inventory build that you have going into '27, should we think about these elevated inventory levels maybe as the new normal given an uncertain cost environment, or do you also maybe expect some degree of normalization in '27 there?

Kyle Lorentzen

Yes, I think we're seeing really two impacts on inventory. One is the memory pricing, and Chuck talked about that. I don't think we feel like that's going away anytime soon, so I think we'll continue to see elevated levels. To be honest with you, the larger driver of the inventory is some of these timing issues, right? So we've built product that's now being pushed out. We would expect to see some normalization of that inventory in the first half of '27. So I don't think this is going back to a completely normalized level, but I think we will see some gain back in inventory in the first half of '27, just based on some inventory that we're holding related to some of these pushouts.

Joseph Cardoso

Got it. Thank you.

Operator

Thank you, and I would now like to hand the conference back over to Chuck Treadway for closing remarks.

Charles Treadway

Thank you for your time today, and I appreciate your interest in our company. Have a great rest of your week. Thank you.

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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