CommScope Reports Strong Q1 As Data Center and Networking Demand Fuel Growth

CommScope (NASDAQ: COMM) reported robust first-quarter 2025 results, posting net sales of $1.11 billion, a 23% year-over-year increase, and adjusted EBITDA of $245 million, up 159% from the prior year. This marked the fourth consecutive quarter of EBITDA improvement, helping boost the stock roughly 15%.

Growth was broad-based across CommScope's core business units. The Connectivity and Cable Solutions (CCS) segment led the charge with a 19.7% revenue increase to $724 million, driven by an 88% surge in enterprise fiber sales tied to data center demand. Networking, Intelligent Cellular and Security Solutions (NICS) saw revenue climb 51% to $163 million as the Ruckus business rebounded with improved channel inventory and new product traction. Access Network Solutions (ANS) posted a 20% increase helped by ongoing DOCSIS 4.0 upgrades and higher legacy license sales.

CEO Chuck Treadway noted, "We are off to an encouraging start in 2025... Our CCS segment led the way with particularly strong performance in data center." Despite some uncertainty around tariffs, the company reaffirmed its full-year core EBITDA guidance of $1.00 to $1.05 billion and expects the second half of the year to be stronger than the first.

Management did acknowledge that Q2 adjusted EBITDA will decline sequentially due to one-time inventory adjustments and compensation timing, but emphasized strong underlying demand trends. Free cash flow remained negative at $202 million for the quarter, though CommScope ended Q1 with total liquidity of $856 million.

CommScope also announced a $50 million share repurchase program, citing undervaluation of its stock. The program is supported by proceeds from the January divestiture of its Outdoor Wireless Networks and Distributed Antenna Systems businesses, which also helped reduce near-term debt maturities.

While some execution risks remain in the early stages of the DOCSIS 4.0 cycle and tariff uncertainty persists, CommScope's strong performance across its major segments and improving margins signal a confident start to 2025.

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