CommScope Holding Company, Inc. Price & Performance (COMM)

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. While full year and quarterly growth rates are on a year over year basis unless otherwise noted. I'll now turn the call over to our President and CEO, Chuck Trentman. Thank you, Matt Smoe. Everyone again. I'll begin on Slide two. I'm pleased to announce our fourth quarter results. In the fourth quarter, CommScope delivered core net sales of $1,170,000,000 year over year increase of 27% and core adjusted EBITDA of $240,000,000 a year over year increase of 69% driven by strength in its CCS [indiscernible] Core adjusted EBITDA as a percent of revenues up 20.6% was one of the highest CommScope has achieved since the ARRIS acquisition. I'm very pleased with our fourth quarter performance as we sequentially improved revenue and adjusted EBITDA for the third consecutive quarter. Our strong adjusted EBITDA as a percentage of revenues validates that we are effectively managing what we can control.

On an annual basis, core CommScope delivered net sales of $4,210,000,000 decreasing 8% from the prior year. The decline in revenue resulted in core adjusted EBITDA of $750,000,000 in line with prior year. We ended the year exceeding our provided $7,000,000 to $750,000,000 core adjusted EBITDA range. As we move into 2025, are well positioned for substantial growth We're exiting the year at a quarterly rate that is substantially higher than the 2024 quarterly average. Based on current visibility, we are projecting 2025 core adjusted EBITDA in the $1,000,000,000 to $1,050,000,000 range. In addition to strong results, we made significant progress on our debt positioning during the fourth quarter by refinancing a portion of our debt. The debt refinancing coupled with the sale of our OWN and DAS businesses that closed on January 31 and subsequent pay down of approximately $2,000,000,000 of debt with the proceeds clearly puts us in a stronger position to focus on free cash flow generation and deleveraging. I would like to thank the lender group that assisted in facilitating our debt to you. The confidence they have our business positions us to continue to implement our strategy and increase our equity value. Finally, I would like to thank our O2B and DAS teams and wish them great success with Amphenol.

Now I'd like to give you an update on each of our core businesses. CCS twenty twenty four full range revenue grew 4.5 and adjusted EBITDA increased 55% compared to full year 2023. In the fourth quarter, CCS revenue grew 36% while CCS adjusted EBITDA increased 110% as a result of revenue growth across all of our product lines. CCS adjusted EBITDA as a percentage of revenue was showing continued strength As we manage new product introductions, cost and fixed cost leverage. As we exit the year, I would like to call out our enterprise fiber business that holds our products that we sell into the data center market. For the full year, that business drove revenues of $623,000,000 a 73% increase year over year. In the fourth quarter alone, the enterprise business had $2.00 $2,000,000 of revenue an increase over fourth quarter twenty twenty three of 96%. With the growth we've seen in 2024, the enterprise fiber business represented 22% of CCS revenue and 27% of total fourth quarter CCS revenue. We are very excited about the market projections for the data center business and our positioning in this market. Third party market analysis indicates 30 plus percent annual revenue growth over the next few years in our business.

The demand in our enterprise fiber business is not solely driven by growth in data centers but the complexity of new AI focused data centers that require five to 10 times the amount of our cabling and connectivity solutions versus the traditional data centers. CommScope is well positioned in the data center markets with the breadth of products and capacity to meet service and quality requirements. We believe we have taken market share and expect continued share gains in '25, We continue to invest in new capacity are in the middle of a capacity expansion that will deliver an additional $300,000,000 of revenue at full capacity.

We would expect additional capacity expansions in 2025 to keep up with the projected strong growth in this market. In our other CCS business units, broadband and structured cable Demand has returned after soft first quarter in 2024. In both businesses, and we are back to demand matching the deployment rates. In broadband, we believe that Veed have a positive impact on our revenues. However, we don't expect anything meaningful to materialize until 2026. Outside of bead, demand drivers over the next few years are strong we are investing to grow share internationally. We're investing in new products, including signing a license agreement for others to use our product. On the structured cable business, we continue to drive market leadership with several new products launched in 2024 including Systemax two point zero, [indiscernible] GIGARREACH XL GigaSpeed XL5. These solutions have demonstrated a renewed focus are agile enough for the most demanding networks. Overall, between data centers, the normalization of customer inventory and the projected market growth in broadband, we are encouraged we move into 2025 and expect very strong growth year over year in CCS. Turning to CoreNex, which excludes DaaS, revenue was up 13 NICS adjusted EBITDA was up $19,000,000 or 285% versus prior year.

This was driven by higher revenue for Ruckus We feel that the challenges in the first half with channel inventory are behind us as inventory levels have normalized. As the business moves back to historical seasonality, we believe the Ruckus business is well positioned for growth in 2025. In addition to normalized inventory and subsequent demand, we have seen a lot of traction with our Ruckus initiatives including our recently announced Ruckus Edge platform as well as a specific vertical strategy focused on manufacturing, higher education and pro AV markets. RuckusEdge that we called out on our last call has seen increased traction. This platform extends the cloud based AI Ruckus RuckusOne platform to the edge of the network to enable rapid deployment and simplified management of these networks from anywhere. Making it easier than ever to deploy maintain and expand networks. In addition, we have introduced an improved channel partner program and added a number of sales resources. Just like our CCS segment, remain bullish on the core NEX business and are investing for our next phase of growth. Finishing our core business updates with ANS, We previously mentioned 2024 has been a transitional year for ANS driving historically weak performance.

Our customers were faced with larger than expected inventory as well as navigating the choices for next generation HFC architecture and we are still in continued development of next generation products. Despite a weak 2024, we believe ANS is best positioned with decades of knowledge of our customers' ecosystems and our breadth of new products for service providers to take advantage of the latest DOCSIS upgrade cycle. We suite of products includes all areas of the HFC network including virtual CMTS, nodes amplifiers and RPD and RMB modules. During the fourth quarter, we had meaningful shipments of FDX nodes to Comcast and expect to significantly ramp up shipments in 2025. We're the only proven FDX amplifier manufacturer currently in the market and this will result in a major improvement of our business in 2025. Marking the beginning of a multiyear upgrade cycle. We have also moved our virtual CCAP program forward completing many lab trials and are now on several field trials. All major steps to winning business with major HSC Tier one customers [indiscernible] Momentum has been building and the next phase of upgrades are coming. Service providers are going to be tasked with upgrading their next generation networks.

So the real question remains, the timing and magnitude of the upcoming upgrade cycle for our customers. Overall, we are continuing to navigate our business through improved market conditions as some of our businesses are benefiting quicker than others. We are bullish over the next few years in all of our segments. For our core businesses, improved ordering trends, a stronger second half of twenty twenty four and focusing on what we control will help us improve our results in 2025 and beyond. We will continue to control what we can, including supporting our customers as they navigate through their networks upgrades and builds, Based on actions that we have taken, including CommScope NEXT initiatives, we expect strong profitability improvements revenue recovers. This is evident by our strong adjusted EBITDA as a percentage of revenue in the 20.6%. Ultimately, driving company performance and the company's total debt to an adjusted EBITDA ratio below six times by the end of twenty twenty six. And with that, I'd like to turn things over to Kyle to talk more about our full year and fourth quarter results.

Thank you, Chuck.

Good morning, everyone. I'll start with an overview of our full year 2024 results on Slide three.

For the full year, CommScope reported net sales from continuing operations of $4,206,000,000 a decrease of 8% from the prior year. Primarily driven by the delayed upgrade cycle in A and S. Adjusted EBITDA from continuing operations was $700,000,000 which increased by 5%. Adjusted EPS was a loss of $0.03 per share.

For core CommScope, which excludes the OWN and DOS businesses, and general corporate costs that were previously allocated to the OWN, DAS and Home businesses we reported core adjusted EBITDA of $756,000,000 for the full year of 2024 which ended flat versus prior year.

Our adjusted EBITDA as a percentage of revenues of 18% increased by 140 basis points year over year as we continue to manage what we can control, including costs. For CommScope, including OWN and DOS, we reported net sales of $5,472,000,000 which decreased 5% from prior year with adjusted EBITDA of $1,095,000,000 for the full year of 2024 which increased 10% Turning now to our fourth quarter results on Slide four. For core CommScope, which excludes the OWN and DOS businesses, and general corporate costs that were previously allocated to the OWN, DAS and Home businesses we reported core adjusted EBITDA of $240,000,000 for the fourth quarter of twenty twenty four which increased 69% from prior year.

It should be noted that these results include a one time inventory charge of $18,000,000 in our A and S business. Without that charge, adjusted EBITDA would have been $258,000,000 The actual result was a 9% improvement sequentially versus the third quarter. Our adjusted EBITDA as a percentage of revenues of 20.6% increased by five ten basis points year over year. For the fourth quarter, CommScope reported net sales from continuing operations of $1,169,000,000 an increase of 27% from the prior year. Driven by an increase in all segments. Adjusted EBITDA from continuing operations of $223,000,000 increased by 87% Adjusted EPS was $0.18 per share.

We experienced improved sequential revenue and adjusted EBITDA driven by increasing demand, in CCS and ANF products. For CommScope, including OWN and DOS, we reported net sales of $1,502,000,000 which increased 27% from prior year.

With adjusted EBITDA of $330,000,000 for the fourth quarter of twenty twenty four. Increasing 75% from prior year.

Core CommScope backlog ended the quarter at $9,000,000 up versus the end of the third quarter. As mentioned previously, in all of our businesses, we are back to normalized backlog levels with short lead times. And we now expect our core businesses to align closer to historic quarterly order trends. Turning now to our fourth quarter highlights on Slide five.

Starting with CCS net sales of $754,000,000 increased 36% from the prior year. CCS adjusted EBITDA of $176,000,000 increased 110% from the prior year.

CCS adjusted EBITDA as a percentage of revenue for the quarter remained strong at 23.4% driven by favorable mix cost savings and cost leverage. Although we expect CCS adjusted EBITDA as a percentage of revenue to remain we would not expect it to remain at this level for the first quarter of twenty twenty five as we return to normal seasonality and lower activity levels in the first and fourth quarters. The CCS revenue increase was driven by all product lines with hyperscale and cloud data centers seeing the strongest growth. We are excited about the data center market projections and our positioning in the market. Based on third party analysis and discussions with our customers, we expect 30% plus annual growth over the next several years in this market. We are well positioned to take market share as we continue to invest in capacity new products.

Our enterprise fiber business grew 73% in 2024. On a sequential basis, overall CCS grew 2%. Looking towards the first quarter, we expect revenue to be in line with fourth quarter but EBITDA to decline based on product mix. Core mix net sales of $154,000,000 increased by 13% versus the fourth quarter of twenty twenty three driven by normalized inventory in the channel. Core NICS adjusted EBITDA of $26,000,000 increased 285% from the prior year primarily driven by the increase in Ruckus revenue. As noted in previous calls, the overhang from channel inventory lasted through the first half of twenty twenty four and started to improve in the third quarter.

On a sequential basis, revenue decreased 2% and EBITDA decreased 6% due to seasonality.

We continue to drive our vertical market strategies and ruckus initiatives including Ruckus Edge and Wi Fi seven initiatives. In addition, we continue to shift more of our business to subscription, With the new products, and vertical market focus, we are well positioned to take market share in the medium and long term. We are making a large investment in our go to market organization investing approximately $15,000,000 in frontline sales to expand our reach. First quarter NICS adjusted EBITDA is expected to decline compared to fourth Due to increase in variable compensation, and a return to historical order patterns in which Q4 and Q1 tend to be lower. A and S net sales of $261,000,000 increased 12% from the prior year as customer inventory levels begin to stabilize, and we saw some initial shipments of our FDX products. A and S adjusted EBITDA of $38,000,000 was down $14,000,000 or 27% from the prior year driven by lower software revenue, unfavorable product mix and an increase in E and O charges in the quarter. As mentioned earlier, A and S realized a one time $18,000,000 inventory write down in the fourth quarter. A and S had a very challenging 2024 as customers continue to delay their upgrade cycle and the legacy business in first quarter versus the fourth quarter due to project timing However, we are excited about 2025 as we launch our FDX and unified products.

We are expecting a strong rebound in revenue and adjusted EBITDA as our investments made over the last three years on product development have positioned us for the pending upgrade cycle. Business remains well positioned to take advantage of upgrade cycles as we have decades of experience with customer ecosystems. The largest installed base and the broadest suite of products. Performance will be driven by the speed and magnitude of the upcoming upgrade cycle that is in early stages. Finally, early in the first quarter, we completed the divestiture Net sales of these two businesses were $333,000,000 in the fourth quarter and increased 27% from the prior year. Note that the activity of these businesses reported as discontinued operations while the assets and liabilities of these businesses were reported as held for sale this quarter. Turning to Slide six for an update on cash flow.

During the quarter, we generated $278,000,000 from cash flow from operations and free cash flow of $271,000,000 twenty twenty four fourth quarter cash flow from operations increased from the prior year driven by higher EBITDA. As we look at cash flow guidance for 2025, we expect breakeven cash flow In this guidance, we project an investment in capital expenditures and working capital of over $200,000,000 driven by growth in the business. I would highlight that historically first quarter is a quarter with significant use of cash driven by a high cash interest payment quarter. And incentive payouts. Turning to Slide seven for an update on our liquidity and capital structure. During the fourth quarter, our cash and liquidity remained strong. We ended the quarter with $663,000,000 in global cash and total available cash and liquidity of roughly $1,100,000,000 During the quarter, our cash balance increased by $2.00 $7,000,000 We drew $200,000,000 on our ABL revolver during the fourth quarter as part of our refinancing terms. We repaid all outstanding amounts of the ABL at the January after closing our transaction for the OWN and DAS business to Anthonol. It should also be noted that we lost approximately $140,000,000 of our ABL availability with the OWN DOS transaction During the quarter, CommScope entered into a new debt agreement with its existing first lien lenders to borrow $3,150,000,000 first lien term loan maturing in 2029 and $1,000,000,000 in first lien notes maturing in 02/1931.

Proceeds from the new first lien debt enabled the company to fully repay its senior unsecured notes due in 2025 and its existing senior secured term loan facility. Proceeds from the previously announced sale of the company's OWM segment as well as its DOS business unit to Amphenol for $2,100,000,000 were used to repay all outstanding amounts under the company's asset backed revolving credit facility, repay in part the company's 4.75% senior secured notes due 2029 repay in full the company's 6% senior secured notes due 2026. And pay fees and expenses associated with the transaction. We purchased no debt on the open market However, going forward, we will continue to use cash opportunistically to buy back securities across the breadth of our capital structure.

The company ended the quarter with net leverage ratio of 7.8 times down from the prior quarter of 9.1 times. The calculation of the net leverage includes the OWN and DOS businesses. I'm now turning to Slide eight where I will conclude my prepared remarks with some commentary around our expectations for 2025.

In our core business, we have seen sequential quarterly revenue and adjusted EBITDA improvement from the first quarter to the fourth quarter of twenty twenty four.

We exited 2024 in a much stronger position than we started the year. During 2024, we have seen strong recovery in our CCS business driven by data center, Gen AI growth, and inventory normalization.

We expect that this trend will continue.

The core NICS and A and S segments are projected to rebound from challenges in 2024. This is evidenced by improvement in the second half of 2024 in these businesses. Overall, driven by the improved performance throughout 2024, we expect our 2025 adjusted EBITDA in the range of $1,000,000,000 to $1,050,000,000 Similar to what we experienced in 2024, we expect the second half to be stronger than the first half. We would expect first quarter core revenue and adjusted EBITDA to be down from fourth quarter results as we experienced normal seasonality and project timing. We continue to control what we can control including managing costs and supporting our customers. Our core adjusted EBITDA as a percentage of revenue improved from 15.4% in the fourth quarter of twenty twenty three to 20.6% in fourth quarter of twenty twenty four. This is a testament to our priority control what we can and improve long term profitability. And with that, I'd like to give the floor back to Chuck. For some closing remarks. Thank you, Kyle. I'm pleased with where we are positioned as we move into 2025. This is evidenced by our sequential growth during 2024 in the fourth quarter We believe that many of our customer inventory challenges are behind us and demand is growing in all of our segments.

We have made significant investments in our product offerings and capacity over the last several years and are in a great position to take advantage of the projected stronger markets. The data center market alone is a game changer for CommScope. I'm very excited about the market trends and our position. Our teams have done a great job taking advantage of the growth in the data center market with new products As other markets recover and grow, we will continue to focus on what we can control through our CommScope NEXT program. In all of our segments, we have exciting initiatives that can add substantial value to CommScope. And with that, And our first question comes from Matt Lipschamp of Deutsche Bank.

Your line is open.

Hey, guys. Thanks so much. Congrats on the quarter. Two if I could. I guess first on the core adjusted EBITDA guide. So you've guided to $1,000,000,000 to $1,050,000,000 for next year. That implies I think, relative to the pullback in 1Q that you're talking about that's tied to seasonality, a pretty meaningful step up. So I'm wondering Chuck, if you can speak to the Visibility And Confidence Level In That Ramp Up In Forward Periods And Then Secondly, Just In Terms Of Tariffs, I'm Wondering If There's Anything That's Baked Into The Outlook And If You Can Remind Us Of Your Manufacturing Exposure Between The U. S. And other international markets that could be impacted? Okay. So I'll take the confidence in the recovery question first. And look, we've seen sequential quarterly improvement throughout 2024.

We're exiting the year as Kyle said and might did as well at $240,000,000 of adjusted EBITDA and that includes a $17,000,000 inventory $18,000,000 inventory charge. And when you think about these things together, or separately, I mean, this is well over $950,000,000 adjusted EBITDA going forward. I'd also say that we've had lots of positive conversations with our customers all the segments and I would say the main two drivers to think about in terms of recovery are both the data center business as well as the FDX launch. In terms of Cerrocellos, We manufacture a lot in The U. S. As well as in countries where we sell our products. I'd say overall, we're very supportive of U. S. Manufacturing. Our most significant and immediate exposure I would say, which is similar to our competition is Mexico. And just like others, we're waiting to see what happens with tariffs. In the short term, we're evaluating price increases. And then I would say in the medium term, potentially moving some manufacturing and warehousing But I would say in most cases, we believe we're in a similar similar position with the competition.

Great. Thank you.

Thank you. Our next question comes from Stephen Fox The Fox Advisors, your line is open.

Hey, good morning, everyone. A couple of Chuck, I was wondering first of all, you mentioned market share gains a couple of times when talking about the enterprise fiber business. Can you sort of dig into what's driving that and also any new products that you're excited about in that business specifically? And then second, a little bit of a definitional question. You then talked about broadband and structured cabling. And structured cabling can also be in the enterprise, I guess, depending on how we're defining on the copper side. So I guess can you talk about structured cabling from a copper standpoint in enterprise or LAN networks and how you're thinking about that for the year?

Yes. In terms of data center, positioning of our company, I'd say, overall, it's about now 15% of our company As Kyle mentioned, it was 22% for CCS in 2024 and then 27% of our business in the Q4. When you think about some of the numbers we talked about growth quarter over quarter, I mean year over year for the fourth quarter, I mean almost 100% We believe believe we're a leader in the space. I mean, the products that we're talking about are MPO connectors, raceways and panels. And We've also went out to third parties to look at what does this mean to us, what does this market mean to us, [indiscernible] And what's happening in the space and we see that growing at approximately 30% over the next few years. [indiscernible] I just look at our numbers compared to what I hear from others and I think that we are gaining share there. But I would say in general, it's just a very fast growing market and we're very pleased that we're in it.

I'll let Kyle take the second question.

Yes. So on the copper side of the business, I think we saw in 2024 a lot of the same dynamics that we saw in some of the other markets like broadband where you know There was an overbuild of customer inventory They worked the inventory off sort of 2023 and early in 2024. And we saw a recovery we feel like we're a strong leader there. The technology leader.

And I think Chuck mentioned some very specific products that we like our giga speed product that we rolled out [indiscernible] '24. So I think our view on the copper business is we're the leader. We'll see some growth from '24 to '25, but we saw strong growth in '24 primarily driven by just customer inventory normalization as they work down inventory that they built in 2023 and early in 2024.

And Stephen, your question about structured cable, I mean, there's salute when you think about the enterprise space and buildings, I mean, copper is a big piece of it, but there's also a fiber piece too. So we don't want to think that we're we don't want people to think we're only copper in the buildings, we're also fiber in the buildings as well. So that's why we're moving to more of a naming convention of structured cable.

Great. That's all very helpful. Thank you.

Thank you. And our next question comes from Simon Leopold of Raymond James. Your line is open.

Thank you very much. Appreciate you taking the question. Got two here. One is looking at this progress in data center, I know know historically you were heavily levered towards enterprise and clearly you're getting some traction here with the larger buyers like the hyperscalers So within this this growth and the outlook, could you help us gain a better understanding of where you stand today within the data center business as to the split between those hyperscale type buyers and your more traditional enterprise Then I've got a follow-up on the A and S segment.

So I think as we think about data center, I mean, we're not going to get into specific numbers, but I just think like generally in the market, it's definitely weighted toward hyperscaler. The hyperscale the hyperscalers are the drivers of that market. Although we play outside of the the hyperscalers, Definitely, it's our business is more weighted toward hyperscalers than it is the other part of the business. I think what we'd say about the other part of the business is we saw this is our growth in 2024 isn't coming solely from hyperscalers, it's coming from hyperscalers in the and the other cloud data center customers that we have.

Great. And then on the A and S business, you did highlight in your comments the amplifiers which sound like they're on a good trend, but wondering about RPDs and nodes. I have the impression you're a share gainer in that aspect as well. And maybe just to set a little bit of context in terms of within ANS, how material our amplifier is expected to be to the mix? I think we've been estimating about a of the revenue Just wondering if that's the right ballpark When you look at the RPD nodes and amplify RPD nodes and modules. I would say when you think about that, we believe we're going to be gaining share there because we've been I would say some of the competition went out first and now we're going to be getting more of our share of those pieces. So that's the main point there. In terms of the data in terms of the The actual size of the FDX business compared to the total Yes. I mean, the amplifier business is a little bit higher than the the third it's probably in the 40% to 50% range of the A and S business. That clearly cycles year to year based on just project timing.

I think as we think about the FDX amplifier ramp that we were talking about in 2025 I mean that's a pretty substantial ramp as we roll those products out throughout 2025, the impact that we had in Q4 for the FDX amplifier was relatively modest. And we'll see that ramp up. So our amplifier business is probably in that 40% range.

Of the overall business.

Thank you. That was very helpful.

Thank you. And our next question comes from Neder Marshall of Morgan Stanley. Your line is open.

Great, thanks. Maybe two questions for me. [indiscernible] appreciate kind of the EBITDA guide. Just are there any kind of rough contextualization of kind of revenue growth that's kind of associated with that or just revenue range we should be thinking of? And then second, on the mix business, as you look at improvement there throughout the year, how are you judging kind of pent up demand for kind of this edge refresh launch versus kind of just kind of fundamental demand coming back? I'll take the second question and Kyle can hit the first one.

I would say what we're really seeing here in the next business is the channel inventory build is behind and I would say it's back to normal growth. And we're expecting that to be higher single digits per year over the next few years, And then what's really helping us here is our full suite of products. I mean, Ruckus One and Wi Fi seven are getting good traction. And we're focused on growing share market share specifically in the the verticals that we talked about before. And I think another big important piece for us here is the investments. We're going to be investing about $15,000,000 in our direct sales force to improve coverage and to grow the business. And we also think there's a little bit of that's going to help us is this back to office. We believe there's going to be some help some help there. Yes. On the we're not guiding to a specific revenue number.

But I guess while I qualify that is on a year over year basis full year we're probably talking about somewhere in the 20% growth in revenue. Albeit as you know, the ramp in our exit rate in 2024 is substantially higher than the than the average that we saw in 'twenty four. So if you'll just think about it, it's in that 20% range of revenue growth Great. Thank you.

Thank you. Our next question comes from Suneet Chatterjee of JPMorgan. Your line is open. Hi. This is Priyanka Sapa on for Samik. And so I think we want to pinpoint on the question on FDX amplifiers. Can you walk us through how you anticipate this rollout of FDX amplifier Well, I would say we shipped in the fourth quarter, we probably shipped about $50,000,000 worth of FDX amplifiers. And as we go into 2025, we're going to ship as much as $300,000,000 I would say that that's not all incremental because the FDX could cannibalize some of the previous generation amplifier products.

Yes. It was also, I think you mentioned previously like a step function chain in 2Q. Is that going to be a step function chain in 2Q that's going to be maintained throughout the rest of the year? Or is there a like some sort of differences in seasonality? On that front?

Yes. I think we'll see we'll see the ramp in Q2 and Q3. I think we will see some quarterly [indiscernible] fluctuations in in just quarter to quarter as the ramp up happens after Q2, Q3. But I think for now the way to think about it is Q1 is going to remain relatively light as we ramp up production. Then Q2 and Q3 will be pretty strong. And then I think beyond that, we'll sort of see how it how it plays out with how our customers do the installations.

Thank you. And our next question comes from Ana Gosspo of Bank of America.

Your line is open.

Hi, thanks very much.

I wonder if if there's any activity or kind of thoughts on the strategic front. So obviously, the O and A debt sale was very helpful in addressing the debt stack. But I think there was also just ideas that other parts of your business could be attractive and other sorts of strategic combination. So wondering if if there's anything that's still opportunistically possible there or has that largely died down now that you've been able to address that program?

Yes, I'd just say, look, we're really head down focused on running our business right now. We're really excited about data center business, FDX, the new products in structured cabling, I mean, probably for the first time since Kyle and I have been here that all three businesses are now hitting on [indiscernible] [indiscernible] good stride at the same time. So we got a lot to do here. Okay.

Okay. Thanks very much.

Thank you. I'm showing no further questions at this time. I'd like to turn it back to Chuck Treadway for closing remarks.

Yes. I'd like to thank you all for your time today and I appreciate your interest in CommScope. Have a great rest of your week. Thank you.

This concludes today's conference call. Thank you for participating and you may now disconnect.