Clearfield, Inc. (NASDAQ:CLFD) Q4 2025 Earnings Call Transcript

Clearfield, Inc. (NASDAQ:CLFD) Q4 2025 Earnings Call Transcript November 25, 2025

Clearfield, Inc. beats earnings expectations. Reported EPS is $0.13, expectations were $0.09.

Operator: Listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch tone phone. To withdraw your question, please press star then 2. Please note this event is being recorded. At this time, I’d like to turn the floor over to Gregory McNiff. Investor Relations. Sir, please go ahead. Thank you.

Gregory McNiff: Joining me on today’s call are Cheryl P. Beranek, Clearfield’s President and CEO, and Daniel R. Herzog, Clearfield’s CFO. As a reminder, Clearfield, Inc. publishes a quarterly shareholder letter which provides an overview of the company’s financial results, operational highlights, and future outlook. You can find both the shareholder letter and the earnings release on Clearfield’s Relations website. After prepared remarks, we will open the floor for a question and answer session. Please note that during this call, management will be making remarks regarding future events and the future financial performance of the company. These remarks constitute forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act.

These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. It is important to also note that the company undertakes no obligation to update such statements except as required by law. The company cautions you to consider risk factors that could cause actual results to differ materially from those in the forward-looking statements contained in today’s press release, shareholder letter, and on this conference call. The Risk Factors section in Clearfield’s most recent Form 10-K filing with the Securities and Exchange Commission and its subsequent filings on Form 10-Q provide a description of these risks. Additionally, as announced on November 12, 2025, Clearfield, Inc.

has sold its Nestor Cables business. Following the divestiture of Nestor, we are reporting only on the Clearfield segment. Beginning with this release, Clearfield is reflected as continuing operations, with Nestor classified as discontinuing operations and held for sale for fiscal 2025 and all prior periods on our financials. With that, I would like to turn the call over to Clearfield’s President and CEO, Cheryl P. Beranek. Cheryl?

Cheryl P. Beranek: Good morning, everyone. And thank you for joining us to discuss Clearfield’s fourth quarter and full year fiscal 2025 results. I’ll begin with a brief overview of the quarter, discuss our decision to divest the Nestor business, share updates on our long-term strategy, and then turn the call over to Dan for a summary of our financial performance and outlook for fiscal 2026. Fourth quarter net sales from Clearfield’s continuing operations of $41.1 million were up 13% year over year. For the full year, Clearfield’s continuing operations net sales grew 20% to $150 million, demonstrating solid execution as we continue to focus on growing within the industry and driving market share gains. After a thorough and comprehensive review of the NEF segment, we made the decision to divest the business.

This move allows us to redeploy resources toward our core North American operations and higher return opportunities. Our acquisition of Nestor was focused on gaining access to a key technology, namely the ability to manufacture our own line of FieldShield cable, and we achieved our objective. We strengthened our vertical integration and Build America, Buy America compliance through the successful transfer of cable manufacturing technology into our US and Mexico facilities. However, expanding Nestor’s business beyond Finland into the European market proved to be a lower margin opportunity. Despite our efforts to improve margins through process improvements and new product introductions, it resulted in a suboptimal use of capital. The transaction resulted in a $10.4 million noncash write-down in the fourth quarter with minimal cash impact.

Importantly, the operational benefits from Nestor’s integration remain embedded in our manufacturing platform. This divestiture sharpens our focus, improves our long-term margin profile, and better aligns resources with Clearfield’s strategic priorities. Looking ahead, our focus remains on protecting what defines Clearfield: craftsmanship, reliability, and service while leveraging our core strength and expanding into areas where we can create the most value. We continue to execute on our Better Broadband and Beyond strategy through three core pillars: protecting our core community broadband business by ensuring that the broadband service providers who have long relied on Clearfield continue to have the products, service, and support they need to succeed; leveraging our market position into new applications and environments where fiber connectivity plays a growing role, including next-generation wireless networks from the metro core to the cell site; and expanding into adjacent markets by utilizing our core competencies to allow us to reach new customers and to strengthen our leadership in broadband fiber infrastructure.

As hyperscalers rely on smaller ISPs to push part of their compute workloads closer to the edge, Clearfield’s position with regional providers opens a new growth vehicle to the company. This disciplined approach positions Clearfield for measured growth as the market continues to recover. As part of this next phase, Clearfield will introduce two significant new product lines. In 2026, we will launch a complete line of splice cases, expanding our offering and deepening engagement with customers who operate in environments that require splicing. After extensive review and months of successful field demonstration, we believe this new solution represents the best in class. Following that product introduction, we will release a next-generation fiber management cassette, optimized for non-hyperscale data centers, a fast-growing market where Clearfield’s modular design and innovation provide a unique advantage.

These launches mark the start of a new generation of innovation as we extend our reach within and beyond traditional broadband markets. Another important element of our strategy is investing in sales development and expanding our distribution channels. We have enhanced our leadership team to support the new phase of growth. Anise Kanakam, our new Chief Commercial Officer, is integrating sales and marketing to align go-to-market strategy with product innovation. Mike Ward, who recently joined as our new Vice President of Broadband Sales, and Mark Hempel, who joined as Vice President of Distribution Channels and Strategic Alliances, bring deep industry experience and will strengthen our tier one and channel sales capabilities. Together, these leaders bring renewed focus, operational rigor, and energy to the organization, positioning Clearfield for the next chapter of growth.

With respect to our distribution channels, our long-standing partners remain essential contributors to our success, connecting Clearfield Solutions to broadband service providers. Building on that strong foundation, we recently added Wiremasters as a distribution partner who has begun to distribute Clearfield’s fiber optic connectivity and management products globally, with an emphasis on the defense and aerospace markets. And we plan to add a wireless-focused partner early in fiscal 2026, opening new opportunities in cellular backhaul and emerging edge applications. These efforts strengthen our access to new customer groups while maintaining close collaboration with new existing partners who continue to be key to our growth. I want to briefly comment on the BEAD program.

We are pleased that 18 of the 52 submitted proposals have been approved by the NTIA. Fiber remains the overwhelming medium for delivering broadband based on the proposals submitted. We intend to vigorously pursue this opportunity and will keep you updated as we approach the deployment stage. Fiscal year 2025 was a transformational year for Clearfield, one defined by strategic focus, leadership investment, and a return to growth and profitability. As we enter fiscal 2026, we are executing with confidence on our Better Broadband and Beyond strategy, driving innovation across our core markets while expanding into adjacent opportunities that enhance long-term shareholder value. With that, I’ll turn the call over to Daniel R. Herzog, who will review our fourth quarter and full year results and provide our outlook for fiscal 2026.

Daniel R. Herzog: Thank you, Cheryl, and good morning, everyone. I will now review our fourth quarter results, beginning with sales. This quarter marks the first period in which Nestor’s results are classified under discontinued operations on our income statement. As a result, the Clearfield segment now reflects our continuing operations, and all quarter, full year, and prior period comparisons are now provided on a Clearfield continuing operations only basis to ensure clarity. Fourth quarter net sales from Clearfield’s continuing operations were $41.1 million, up 13% over the same period from $36.2 million in the prior year. Gross margin improved from 26.6% to 34.6%, which was driven by better manufacturing efficiencies and overhead absorption with higher volume.

Net income per share from continuing operations was 13¢ in 2025, versus a loss of 1¢ per share in the comparable period last year. For the full fiscal year, net sales from continuing operations were $150.1 million, up 20% from $125.6 million in fiscal year 2024. Gross margin expanded from 20.6% to 33.7%, mainly as a result of better overhead absorption with higher volume, lower inventory reserve charges as a result of improved inventory utilization, along with increases in production efficiency from our continuous improvement programs. While we reported an overall loss per share for fiscal 2025 of 58¢, Nestor’s discontinued operations and our impairment write-down of that business contributed a net loss of $1.03 per share. This was offset by net income per share of 45¢ from Clearfield’s continuing operations, which compares to a net loss per share of 58¢ in the comparable period in fiscal 2024.

These results underscore the strength of our continuing operations moving forward, which continue to demonstrate solid execution and share gains. We ended the quarter with approximately $166 million in cash and investments, up from $153 million in the prior year, reflecting continued strength in our balance sheet and disciplined operational execution. This financial position enables us to invest in innovation, product development, and market expansion programs that will drive long-term value creation. The company also invested $16.5 million in repurchasing 551,000 shares during the fiscal year. In addition, our board of directors has increased our share buyback authorization from $65 million to $85 million, providing us with $28.4 million available for additional repurchases when added to the $8.4 million repurchase amount remaining on September 30, 2025.

For the full year fiscal 2026, we expect net sales from continuing operations in the range of $160 to $170 million. We expect growth to be driven by steady demand for fiber connectivity with continued strength across our large regional and MSO customers. We expect the late start to the BEAD program and the recent government shutdown to pressure investments both from private funding as well as government programs in our community broadband market early in the year. We expect operating expenses as a percentage of revenue to remain consistent with fiscal 2025 and earnings per share from continuing operations in the range of 48¢ to 62¢. For 2026, we anticipate net sales from continuing operations in the range of $30 million to $33 million, total operating expenses remain consistent with 2025, and net loss per share in the range of 8¢ to breakeven.

The earnings per share ranges are based on the number of shares outstanding at the end of the fourth quarter and do not reflect potential share repurchases completed. And with that, we will open the call to your questions.

Operator: We will now begin the question and answer session.

Gregory McNiff: To ask a question,

Operator: you may press star then 1 on your touch tone phone. If you are using a speaker phone, please pick up your handset before pressing the key. If at any time your question has been addressed, and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question today comes from Ryan Boyer Koontz with Needham and Co. Please go ahead.

Q&A Session

Ryan Boyer Koontz: Great. Thanks. Good morning. I wanted to ask about your comments about the shutdown. Obviously, it may be some impacts on BEAD here, but were there other programs, subsidy programs, or customer behaviors you could point to that might have impacted, you know, either revenue or bookings or your outlook for Q4? I’m sorry. Your fiscal Q1.

Cheryl P. Beranek: Mhmm. Right. Yeah. Good morning, Ryan. We saw it in everything, you know, kind of across the board, probably, you know, A chem, probably the most effective. You know, not that it’s going to diminish the amount of money available, but it did affect bookings, you know, in the fourth quarter that would then both because of our short lead times, both ship in the fourth quarter and lead into first. So it’s, you know, an unfortunate circumstance and one of those things that, you know, I guess we all don’t even realize how much government funding and government affect us.

Ryan Boyer Koontz: Do you, Cheryl, do you have a kind of a timeline when you expect that to catch up to normal? I would think, maybe over the next few quarters? Or is it just a

Cheryl P. Beranek: Yeah. We’ll be back to normal by the second quarter as it relates to the government shutdown. So the government shutdown did affect, you know, bookings and our forecast for a soft first quarter into next year. But I don’t expect it to affect the total year. So second quarter, we should be normalized.

Ryan Boyer Koontz: Got it. And specifically there then within your reported fourth quarter, Community Broadband looked a little soft. I that’s what you’re pointing to there? In the Yeah. The

Cheryl P. Beranek: Right. The government the community broadband, it was soft, I mean, in the fourth quarter. It’s actually kind of flat over last year, which is really unusual. Even down a little bit over last year. Community broadband is part of was partly the government shutdown. I would say more affected over the course of the year by the delay in BEAD. You know, certainly, the smaller the service provider, the more the delay in BEAD has affected both their deployments and their planning. You know, their engineering dollars and their engineering availability, and then, you know, financing, setting aside money to deal with BEAD. And we even saw it in private investment as well. Kind of in that smaller space because, you know, community broadband is more than just the tier three operator.

It’s, you know, some of the private equity money that is, you know, being used at the smaller level. And we just saw money being set it was kind of sitting on the sidelines waiting for BEAD to figure out where it’s going to be deployed. Because, you know, you we don’t sometimes think about that where the BEAD dollars go affects where the private investment the timing of private investment because you want to leverage the money that or the fiber that’s going into a BEAD network can be leveraged for, you know, a middle mile and other work elsewhere. So it does have a follow-on or a kind of a waterfall effect. So we’re anxious to get the BEAD awards out. And while it won’t the 26 yeah. I think we’re going to see 26 have BEAD dollars. But the biggest impact of it is going to be private money coming back because BEAD is now actually finally figured out.

Ryan Boyer Koontz: Got it. Helpful. And, Dan, on the gross margin outlook there relative to where you are in continuing operations. How do you think about broadly margins going forward? Is it purely a matter of scale at this point? And you expect some modest improvements in gross margin going forward with higher revenues?

Daniel R. Herzog: Yep. That’s exactly how to read that, Ryan. Obviously, volume dependent. So first quarter would be looking a little bit lighter. But, and scaling, with the revenue increases from there. Mhmm.

Ryan Boyer Koontz: Got it. And, Cheryl, any thoughts about industry fiber supply right now? Is that coming up much of a concern? Have you heard that from your customers at all in terms of raw fiber? Unfortunately.

Cheryl P. Beranek: Over and over. And then and then in every customer regardless of the size. So the data center glut of utilization of fiber is affecting Corning’s allocation. And then it affects Corning’s allocation to other service providers, which in turn, you know, will affect, you know, broadband deployments. So we’re aggressively help both for our own sake as well as for our customer’s sake. Sourcing all of and identifying equivalent fibers that can be approved in those networks.

Ryan Boyer Koontz: Got it. Really helpful. That’s all I’ve got for now. Thank you. Yeah.

Operator: Mhmm. The next question comes from Scott Searle with Roth Capital. Please go ahead.

Scott Searle: Hey, good morning. Thanks for taking the questions. Hey, maybe just a couple of quick calibration questions. Dan, I’m just wondering what Nestor was in September just to kind of look at our published numbers apples to apples. And then looking into December, could you give us a little bit of color in terms of the sequential outlook by the different customer classifications? It sounds like community broadband will be under a little bit of pressure. Given BEAD and government shutdowns, but I’d love to have a little bit of color on that front. And what you need in terms of turns to get to the lower end of the range and what the visibility is in the immediate outlook? Then I had a follow-up.

Daniel R. Herzog: Yes, I’ll take the first one there. Nestor finished their fourth quarter with $9.4 million in revenue. So with the Clearfield being $41.1 million. So that would have put us at $50.4 million roughly exactly.

Scott Searle: Helpful. And then in terms of the December outlook,

Cheryl P. Beranek: Mhmm. Yes. Community broadband is definitely a bit pressured as I indicated both from the government’s and, you know, and the private money that goes around it. We continue to be extremely pleased with our work in the large regional group as well in the regional MSO markets. They now comprise about close to 40% of our business. And, you know, that really is a means of leveraging our existing sales channel in that, you know, the large regional and the regional cable operator, typically, and we’ll have deployments in the same neighborhoods as the community broadband team. And so our work, our reputation, and our sales channel excuse me, in community broadband is what we’re able to leverage for that MSO in large regional markets.

Anyone knows our larger customers, than the community broadband team. Is, and it means we’ll get some larger orders some opportunity to scale with it. So, with community broadband coming back, in fact, let me look through for a second. I mean, the MSOs were up for the year close to 40%. Large regionals for the year were up close to 60%. So with that momentum and with community broadband, hopefully, we anticipate coming back in the second quarter. We could have, you know, a really strong, bill season for next year. I just wanted to go back a little bit to the lack of fiber that Ryan brought up earlier. And that’s one of the reasons that we’re if people look at our long-term annual forecast, our annual forecast is guided by what we can see. That’s part of our record reputation, as a company is to be, I wouldn’t say conservative, but I would say deliberate about our forecast.

And with the lack of fiber, being outside of our control, that could be one of the contributing factors of our long-term numbers.

Scott Searle: Great. Thank you. And Cheryl, if I could, just to follow-up in terms of the annual outlook, starting the year slow, but it sounds like you start to see normalization in the second quarter. The math on the $160 to $170 million range implies kind of mid-forties through the rest of the year, so I assume that’s kind of ramping. But I’m wondering what you’re factoring into that forecast. Is it just normalization of the existing customer base and spending patterns? Much are you factoring in for BEAD? And if you got some new products, seem like they’re kind of intriguing in terms of your next-gen splicing and data center. I’m wondering how they fit into the equation well.

Cheryl P. Beranek: Right. We are not identifying a significant amount of revenue for new product introductions. Only a few million dollars because, typically, you know, you need a full especially for outside plant products, you need a full year for them to go through an outside weather cycle before you have a long-term commitment from, for, you know, high high-end revenue. We see high the new product splice case and really excited about the NextGen, cassette line. As being more significant revenue in ’27.

Scott Searle: Very good. And just in terms of how you’re thinking about BEAD, in that numbers, in that $160 to $170 million? Definitely. Yeah. I would say the we’re looking at, you know, probably

Cheryl P. Beranek: less than $10 million, and that’s going to be remember, they gotta build first with passing home, with kind of middle mile stuff and the actual construction of placing cabinets is probably gonna be in our fourth quarter, and that’s one of the things that we have to remember for our numbers is that since our numbers end in September, we tend to miss some of the fall numbers, in the bill season. So as best with would you so next year’s fourth quarter and first quarter will be significantly stronger than what we’re seeing here.

Scott Searle: Great. And Leslie, if I could, new products what does that do to your addressable market? You know, because ettes, I’m sure, is just extending your existing position. But is what does the data center do? And I’ll get back in the queue.

Cheryl P. Beranek: The next generation cassette line is all about new customers, as well as being, eventually, there’ll be transformational back to our existing customers. So the, as we talked about the next center, to go after the non-hyperscale data center is a I use the word disciplined approach. Because we could go after hyperscalers, and we would lose. Because, you know, that’s a high volume, low mix solution That’s not the way Clearfield is designed. It’s not the way our manufacturing lines are set up. We compete aggressively in a low volume, high mix world. And so data centers at the edge that push to the edge where we’re gonna see our customers and smaller data centers picking up the compute power requirements, you know, from the big guys as they move out that’s where we’re really gonna have a significant opportunity.

Because it’s our space. It’s a space in which that high volume manufactured doesn’t work. You gotta be able to do a lot more you know, push and pull. And so the new data center cassette is gonna allow a lot of unique configurations inside of a particular nine-inch panel, and so that you can design by cassette. So you can expect to see that launched around BICSI in January, and it’ll be fully on debut and on display in that January show.

Scott Searle: Great. Thanks so much. I’ll get back in the queue.

Operator: As a reminder, if you would like to ask a question, The next question comes from Timothy Paul Savageaux with Northland Capital Markets. Please go ahead.

Timothy Paul Savageaux: Hey, good morning. I want to stay on the BEAD theme here. With a couple of questions. First, we’ve seen some of your peers in the access system space talk about receipt of initial orders for BEAD. I think historically, maybe you have some correlation there on the cabinet side, but you know, it sounds like you’re talking about an overall uptick in activity with these approvals. There was maybe some delay from shutdown. But can you talk to when you expect initial orders, or have you seen them yet for BEAD?

Cheryl P. Beranek: Right. You know, because of our short lead time, you know, what we’re seeing is quoting activity, but not necessarily, you know, shipping, you know, activity associated with it. You know, we know pretty much what customers have been identified as anticipating to be receiving money. And so that’s freed up some planning dollars. I would expect we’ll see but we I don’t think we’ll see significant revenue until the summer construction season, so third and fourth quarter.

Timothy Paul Savageaux: Yeah. It makes sense. And just to get a sense of the magnitude of that opportunity, We had a recent you know, big round of approvals I think that was maybe $9 billion in the aggregate. And I think the total is beyond that. I think you mentioned it earlier. And you know, in terms of opportunity for Clearfield, total award value. I used to I think we used to talk about maybe four to 5% of that As addressable by the company. Does that remain the case? And you know, because just on that recent round of approvals that, you know, get you close to $500 million, which is, you know, pretty relative to what you’re doing now. So are those metrics we can still think about?

Cheryl P. Beranek: They absolutely are. So four to 5% of the cost of deployment are products that we offer. We increasingly are working to become that portfolio of supplier so that we would get, you know, the solutions of both being able to pass and to connect the home. The full line and next generation of splice cases is a part of that strategy, keeping our portfolio customers out away from our competition and being able to give those customers who are using our competition splice cases a reason to be able to come back, you know, to our generation and fully being, you know, integrated into our world. You know, every time we place a patch only cabinet, somebody else’s splice case was being used, and then previously somebody else’s vault.

So completing out our product line is really a defensive, more aggressive move in order to put that together. You know, our competition likes to you know, Adtran said, you know, they’re gonna get 25% of the BEAD market. Calix put numbers out there with big numbers. You know, we could tout $500 million, and that’s accurate. But remember, this is a four to five-year build. So we want to make sure that we don’t get everybody’s you know, their eyes bigger than their stomach. You know, we think we’re gonna get a big part of that share, but it would be irresponsible for me to give you a particular number.

Timothy Paul Savageaux: Got it. Very much then. Good and helpful color.

Cheryl P. Beranek: You’re welcome.

Operator: This concludes our question and answer session. I would like to turn the conference back over for any closing remarks.

Cheryl P. Beranek: Yes. Well, thank you so much for the opportunity to, you know, to speak with you this morning. Our apologies that our numbers were delayed by a week, but you can understand with the divestiture of Nestor that we had a few numbers to be able to tie out and put together. We wish our friends at Nestor well. We think the opportunity to focus, you know, having been able to bring that infrastructure into our world, be able to transform Clearfield into a vertically integrated supply chain is really exciting for our potential gross margin and our ability to be that portfolio supplier is exciting. We like I said, we wish Nestor well. We think the transformation of Clearfield into being a bigger, broader supplier with a fully integrated line as we move forward will be opportunistic for our world.

And ’26 will be transformational putting us together for that long-term strategy plan of Better Broadband and Beyond. Thank you for our world. I’m grateful to you now at Thanksgiving time, and I wish you the best and the most joyous of Thanksgiving holidays. Enjoy your families.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.