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Operator: Hello. This is the Chorus Call conference operator. Welcome to Vecima Networks Second Quarter Fiscal 2026 Results Conference Call and Webcast. [Operator Instructions] And the conference is being recorded. [Operator Instructions] Presenting today on behalf of Vecima Networks are Sumit Kumar, President and CEO; and Judd Schmid, Chief Financial Officer. Today's call will begin with executive commentary on Vecima's financial and operational performance for the second quarter fiscal 2026 results. Lastly, the call will finish with a question-and-answer period of analysts and institutional investors. The press release announcing the company's second quarter fiscal 2026 results as well as the detailed supplemental investor information are posted on Vecima's website at www.vecima.com under the Investor Relations heading. The highlights provided in this call should be understood in conjunction with the company's unaudited interim condensed consolidated financial statements and accompanying notes for the 3 and 6 months ended December 31, 2025 and 2024. Certain statements in this conference call and webcast may constitute forward-looking statements within the meaning of applicable securities laws from which Vecima's actual results could differ. Consequently, attendees should not place undue reliance on such forward-looking statements. All statements other than statements of historical fact are forward-looking statements. These statements include, but are not limited to, statements regarding management's intentions, belief or current expectations with respect to market and general economic conditions, future sales and revenue expectations, future costs and operating performance. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict and/or are beyond our control. Vecima disclaims any intention or obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, except as required by law. Please review the cautionary language in the company's second quarter earnings report and press release of fiscal 2026 as well as its annual information form dated September 25, 2025, regarding the various factors, assumptions and risks that could cause actual results to differ. These documents are available on Vecima's website at www.vecima.com under the Investor Relations heading and on SEDAR at www.sedarplus.ca. At this time, I would like to turn the conference over to Mr. Kumar to proceed with his remarks. Please go ahead.
Sumit Kumar: Good morning, and welcome, everyone. Thank you for joining us. In our earnings release today, we announced that Vecima is nearing the cusp of a major growth inflection. I'm going to start today's call with some comments on this outlook and our expectations for the next 12 months before moving on to an overview of our second quarter highlights. Judd will provide our financial review, and then I'll return to wrap up before we open the call for questions. As you know, the global cable and broadband industries have been preparing for a full-scale transition to next-generation DAA technology for several years now. It's something we've described as a once-in-a-generation technology transition, fundamental to how networks will be built and operated and requiring major multiyear capital investment by operators. From the start, Vecima made a deliberate decision to lead this transition through sustained investment in a comprehensive portfolio of next-generation solutions. It's a strategy that's positioned Vecima as a global leader in DAA technologies, and it's already been -- and it's already driven meaningful growth. But we've always recognized that the true scale of the opportunity would depend on customers moving to full-scale adoption and deployment. While it's taking time to reach this point, that critical new phase of adoption is approaching. On the broadband side, our lead Tier 1 customer is now preparing to expand wide-scale deployment and they've shared their anticipated product needs and expected timing with us. Based on that outlook, we anticipate a sharp rise in demand for our Entra Remote PHY products, including the EN9000 GAP platform and ERM3 and 4 RPDs beginning in the fourth quarter. This is a major multiyear upgrade program. Now with it underway and expanding, we expect it will provide sustained benefits to Vecima over an extended period. On the commercial video side of our portfolio, we also announced today that our lead North American Tier 1 customer has selected our next-generation TerraceIQ platform to underpin the wholesale upgrade of its commercial video network nationally. This includes upgrades to thousands of our customers' existing commercial account properties as well as ongoing rollouts to service new commercial video contracts, and it represents another multiyear opportunity for Vecima. These 2 developments, combined with continued strong demand for our high-margin fiber access products and the traction building for new products like our EN3400 are providing excellent forward visibility. Based on customer indications on a next 12-month basis, we're now estimating revenue growth of between 20% to 30% as compared to the last 12 months. The anticipated demand profile also positions adjusted EBITDA margin for the same period to break through 20% as our product mix expands with higher-margin offerings and as we make gains in operating efficiency. Paired with the top line growth expectation, this translates to an anticipated 70% to 85% increase in next 12-month adjusted EBITDA compared to calendar 2025. I want to note that we continue to see some third quarter timing lumpiness related to recent industry consolidation activity. We discussed this on our last call, but we now expect the impact to be modest and further mitigated by a favorable Q3 product mix. By the fourth quarter, we expect to see demand ramping up sharply. The developments announced today paved the way for renewed and sustained growth, and they follow on another rewarding quarter for Vecima in Q2. So turning to our second quarter results. I'm pleased to report that we achieved solid year-over-year revenue growth of 3.5%, paired with a significantly stronger gross margin percentage of 44.9%. The 850 basis point year-over-year improvement in our gross margin reflects an expected return to a more typical and higher-margin product mix as well as continued improvement in our operating efficiencies. We also generated adjusted EBITDA of $10.6 million in Q2 with an adjusted EBITDA margin of 14.4%. In our Video and Broadband Solutions segment, we turned in a productive quarter marked by steady sales performance, improved profitability and important product and customer advances. We continue to seed the market with our EN9000 platform, the industry's only GAP node, which is gaining deep adoption with customers. We expect the EN9000 platform will continue to pay many short- and long-term dividends as it widely seeds broadband networks with a modular, standardized and future-proof platform that's capable of being upgraded with multiple successive generations of DOCSIS or fiber-to-the-home technology for years to come. We also commenced deliveries of our new EN3400 GAP node, which is a more compact and condensed version of the EN9000, specifically targeted to multi-dwelling unit and enterprise applications. Our innovative new Power Holdover Modules, which provide Entra platforms with protection from power fluctuations in the field also gained traction in Q2. Both the EN3400 and Power Holdover Modules provided meaningful contributions to our Q2 results and VBS product mix. In our Entra Cloud portfolio, we continue to expand vCMTS trials with our lead customer while also expanding our engagement with additional customers. We view vCMTS as a major long-term growth driver for Vecima, supporting an addressable market estimated to be worth USD 350 million by 2029. I also want to highlight the contribution from vCMTS sales is not yet a significant factor in current revenues or within the strong projected growth for the next 12 months, meaning that vCMTS remains a major incremental growth opportunity for the business. On the fiber access side of the portfolio, Q2 was another successful quarter with ongoing strength in Entra optical sales. We also secured our first customer for XGS-PON in the U.S. and closed an order for our new Entra EXS1610 All-PON platform with a European customer. So all in all, an excellent quarter for VBS and our customer engagements for Entra increased to 147 from 123 a year ago. To date, 70 of those customers have purchased Entra products from Vecima. Looking at our other business segments. Our Content Delivery and Storage segment achieved another strong quarter with revenues of $12.3 million, growing sharply both year-over-year and quarter-over-quarter and gross margin climbing to a very robust 65.1%. These results were supported by increased demand for our media scale managed IPTV solutions as customers continue to migrate their networks from QAM to IPTV while also expanding their subscriber bases on IPTV. Second quarter also brought further contribution from our newer dynamic ad insertion products. DAI is providing a compelling use case for operators that are seeking to increase their video ARPUs without having to increase their rates to customers. So as such, it's a highly effective way for our customers to increase their monetization of video while retaining and building their subscriber base, and we view it as an important growth driver for CDS. Turning to Telematics. We achieved another highly profitable quarter with year-over-year revenue growth and an exceptionally strong gross margin of 71.4%. During the quarter, Telematics added 11 new customers and booked 345 new subscriptions for our NERO asset tracking platform. This brought the number of asset tags under management to over 106,000. So a very successful second quarter for Vecima across all 3 of our business segments, and we're moving forward with a very exciting outlook as some of our largest customers advance to wider scale adoption. I'll return to talk more about what we see ahead in just a few moments. But first, I'll pass the call to Judd to provide our Q2 financial review. Judd?
Judson Schmid: Thanks, Sumit, and good morning to everyone with us on the call today. I'll be reviewing our second quarter financial performance in more detail. And for the purposes of this call, I'll assume that everyone has seen our Q2 fiscal 2026 news release, MD&A and financial statements posted on Vecima's website. We had another solid quarter of financial results. Starting with consolidated sales, revenue grew to $73.7 million in the second quarter, increasing 3.5% year-over-year and 3.7% quarter-over-quarter. Our Video and Broadband Solutions segment accounted for $59.6 million of our revenues with VBS sales increasing slightly year-over-year and up 2.8% sequentially compared to Q1. Next-generation Entra DAA products were the key driver of our VBS segment results. At $56.3 million, Entra sales were steady year-over-year and up 2.3% on a sequential quarterly basis. Commercial video sales added $3.2 million to the VBS results and were up 8.7% from Q2 fiscal '25 and 12% from Q1 fiscal '26. In our Content Delivery and Storage segment, second quarter revenues of $12.3 million climbed a sharp 20.7% year-over-year and were up 9.7% from the first quarter of fiscal '26. This growth reflects significant IPTV installation and expansion activity, including a 39% increase in product sales and slightly higher services revenue year-over-year. We continue to note that quarterly sales variations are typical for the CDS segment. In our Telematics segment, second quarter sales of $1.8 million grew 5% year-over-year, but were 3% lower than last quarter. The year-over-year gains reflect the increase in the number of tags and assets now being monitored. As we expected, gross margin rebounded in Q2 with gross margins climbing to 44.9%. That compares very favorably to 36.4% in the same period last year and 42.1% in Q1 of '26. After normalizing for inventory reserves and warrant expense, our adjusted gross margin also increased sharply to 46.4% from 35.6% last year and 43.9% in Q1 of fiscal '26. The improvements in gross margin and adjusted gross margin primarily reflect the return to a higher-margin product mix in our VBS segment and accretive contributions from our CDS segment as well. Turning now to our second quarter operating expenses. These increased slightly to $29.8 million from $29.3 million in Q2 last year. On a quarter-over-quarter basis, operating expenses were $1.8 million higher. Notable year-over-year changes are as follows: G&A expenses were lower at $6.7 million or 9% of sales as compared to $7.3 million or 10% of sales in the same period last year. This $600,000 improvement reflects decreased expenses for legal fees, other professional services, training and development costs, offset by higher expense for salary, wages and benefits. Sales and marketing expenses increased to $9.4 million or 13% of sales from $7.3 million or 10% of sales last year, reflecting lower finished goods inventory allowance recoveries of $100,000 in the current period compared to $1.7 million in Q2 of fiscal '25. R&D expenses for the second quarter increased to $13.2 million, or 18% of sales, from $11.3 million or 16% of sales last year. This is primarily a result of higher amortization of our deferred development costs, along with lower capitalized labor development costs. As we note each quarter, we defer some of our R&D expenditures to future periods until our products begin commercialization. And so reported R&D expense in a period is typically different than the actual cash expenditure. Adjusting for this, our actual cash R&D investment was $16.8 million or 23% of revenues in the second quarter, up from $15.9 million or 22% of revenues in Q2 of last year as we continue to emphasize our investment in future product developments and building our innovation pipeline. Also included in OpEx for Q2 of last year were $2.8 million in restructuring charges related to our workforce reduction at that time. We continue to monitor and control our operating expenses contributing to our bottom line results and do not foresee any significant OpEx increases in the near term. Now looking at bottom line results. Second quarter operating income increased significantly to $3.3 million from an operating loss of $3.4 million in the same period last year. The $6.7 million improvement primarily reflects VBS' higher-margin product mix as well as the increase in CDS sales, which typically carry accretive gross margins and the $2.8 million restructuring charge taken in last year's Q2. Lastly, net income for the second quarter increased to $100,000 or $0 per share from a net loss of $7.9 million or a $0.32 loss per share in the same period of fiscal '25. Additionally, adjusted earnings per share for the second quarter grew to $0.04 from an adjusted loss per share of $0.30 in the same period last year. Turning to the balance sheet. Working capital of $49.3 million decreased from $51.2 million at the end of June of '25. As we discussed, in our MD&A, the components of working capital can be subject to swings from quarter to quarter. Product shipments can be lumpy as they reflect the fluctuating requirements of our customers. Contract timing issues like those with greater than 30-day payment terms also affect working capital, particularly if shipments are back-end weighted for the quarter. Lastly, cash flow provided from operations for the second quarter decreased to $6.8 million from $15.2 million during the same period last year, primarily related to the changes in working capital. Our net debt position as a whole remains conservative however, and stood at $66.9 million at the end of the second quarter, down from a peak of $92 million in Q3 of fiscal '24. We had forecasted a slight increase in our net debt position for Q2 and continue to focus our efforts on paying down our debt. On a final note, the Board of Directors approved a quarterly dividend of $0.055 per common share payable on March 23, 2026, to shareholders of record as of February 22, 2026. It's important to note that this dividend will be designated as an eligible dividend for Canadian income tax purposes. Now back to Sumit.
Sumit Kumar: Thank you, Judd. To recap our expectations for the next 12 months, we are anticipating a year-over-year revenue gain of 20% to 30% with 12-month adjusted EBITDA margin breaking through 20% based on customer indications. We expect to see this momentum growing beginning in Q4, driven by Vecima's portfolio strength, our design wins with major customers and the many other DAA-based gigabit network upgrades that are occurring globally. We anticipate our VBS segment will lead the growth with strong demand for a wide range of next-generation Entra DAA solutions. Our Remote PHY device solutions, our EN9000 and EN8400 platforms and our highly successful Entra Optical fiber-to-the-home portfolio are all expected to be strong contributors. Additionally, our newer EN3400 platforms and Power Holdover Modules are expected to gain momentum over the next 12 months. Our VBS results are also expected to be strongly supported by the program win with our lead Tier 1 customer and related uptake of our TerraceIQ Commercial Video platform. While we haven't yet factored vCMTS contribution into our outlook, this too could have a positive impact on our next 12-month results and will be incremental to the demand profile, nonetheless. In our Content Delivery and Storage segment, we continue to focus on driving revenue growth through managed IPTV expansions with new and existing customers and the rollout of DAI. As always, we note, however, that quarter-to-quarter performance in the CDS segment can be lumpy. And in our Telematics segment, we're anticipating steady and highly profitable performance from our high-margin recurring software and subscriptions-based monitoring business for vehicles and assets. Across Vecima's operations, we're moving forward with a sharp focus on capturing the significant opportunities ahead, both over the next 12 months for high growth and in the long term. Our strategy of building the industry's broadest and most innovative portfolio of interoperable cable and fiber access products and IPTV solutions has created multiple engines for growth. Combined with a wide customer base and deep relationships with some of the world's largest operators and BSPs, we've invested in and built a broad, uniquely innovative and world-leading platform that we enjoy today, and that sets us up for sustained expansion. As wide-scale deployment of DAA now gets underway and IPTV adoption continues to grow, Vecima is uniquely positioned for success, not just in the next 12 months but for years to come. That concludes our formal comments for today, and we'd now be happy to take questions. Operator?
Operator: [Operator Instructions] Our first question comes from Ryan Koontz with Needham & Co.
Ryan Koontz: Nice to hear about the improved outlook this year and gaining momentum there. I want to ask about the GAP node and what you hear are the criteria for customers to decide to go with a traditional node design versus a GAP node. I kind of understand -- I do understand the future-proof investment thesis, but how do you think customers are deciding to go with one versus the other? What do you think the criteria is?
Sumit Kumar: Ryan, thanks for the question. Yes, with the GAP platform, as we've talked about, we've developed in conjunction with our lead Tier 1 operator customer, this future-proof platform that's modular and scalable and can evolve both over multiple generations of cable access, the DOCSIS 3.1, DOCSIS 4.0 and evolve to fiber-to-the-home modules inserted within that same platform and longevity in terms of any other use cases that emerge once those nodes are widely deployed. So operators are typically seeing that, that platform allows them a long runway of capability within the network from successive generations of access technology. You could even go so far as thinking about edge compute and some of the opportunities that arise there from. So -- and we can also mix services within the same platform, cable, DOCSIS, fiber-to-the-home, PON OLTS within the GAP platform. The thermal management is excellent. It gives them a lot of capacity there in terms of the cooling -- the passive cooling that it offers. And in the past, there's been a lot of fragmentation and unique nodes. So we contributed this standard in conjunction with our operator partner. We are the only manufacturer in the world of this platform today. So we have a significant time-to-market advantage. And as we said, it's being broadly adopted giving us a great amount of network incumbency at operators like our lead Tier 1.
Ryan Koontz: Got it. It's helpful. And you mentioned the thermal management. Is it better than a node or what differentiates it from a traditional node in terms of the thermals?
Sumit Kumar: It's just how we've designed the heat dissipation within the platform, how the modules slot into the available slots in the lid and all the network and the way the heat is passing through to the fins on this type of platform. It's taken 30 or 40 years of experience from vendors like us, from our operator partner to know that we -- the peak of engineering for thermal capacity is there in this platform. So we've been forward-looking with what we can do with the platform, again, with our operator partner is helping us to define that standard.
Ryan Koontz: Sure. It sounds like the OLT business is picking up. Are you hearing any changes in terms of fiber deployment plans from customers? Is it still primarily greenfield deployments? Or are you picking up much about rehabbing coax with fiber in the cable industry?
Sumit Kumar: I think the focus definitely has been on network edge, greenfield expansion, more and more opportunities our customers are seeing for that. Of course, the rural subsidy activity is going strong, too, and adding to our customers' footprints and their passings overall. I don't think that overbuild is a focus. We have a lot of capacity on the cable side with 3.1 and 4.0 and the cost advantages there. So the cable network has got a long runway to it for multi-gigabit symmetrical 4.0. There's standardization work being done on generations beyond 4.0 for DOCSIS as well. But the fiber activity, there's a lot of ground to plow on expansion of the network itself without overbuilding.
Ryan Koontz: Got it. You talked about a new win for your new video platform. Do you have a rough idea of what your TAM is there, say, in North America for those sorts of products? I mean is it still primarily a legacy model? I don't think about linear being upgraded a whole lot. I assume you're going to kind of a switched IPTV-type model there. Can you maybe talk about where we are in adoption for those sorts of products?
Sumit Kumar: Great. Yes. No, you're absolutely right that we are going to IP ABR input, switch to [ IP ], you can think of. So the feed to the commercial video platforms is evolving from a linear QAM feed to IPTV ABR. And that's the generational shift that we're seeing in this platform. We've led this market for the past 15 years, and it began when networks were converting to all digital from analog and commercial services and hospitality, in particular, needing a bulk demarcation solution into the property. So that's been a market we've enjoyed for well over a decade, and we have good visibility. Of course, it doesn't have the growth engine capacity, something like broadband access, but it's going to be very meaningful to our results and particularly with this lead Tier 1 with the amount of units of the prior generation that they have fielded with our Terrace QAMs and our TC600Es, we see a very meaningful contribution over the next 12 months and really the next 3 years or so as they upgrade that whole footprint. So I won't get too specific on the TAM side, but 5 years ago, the commercial video -- maybe 5 to 10 years ago, commercial video drove the entirety of Vecima business. So that will give you a sense of the magnitude.
Operator: [Operator Instructions] The next question comes from Alexandre Ryzhikov with LionGuard.
Alexandre Ryzhikov: I guess, Sumit, I just want to focus on your comments around renewed and sustained growth. I get that your largest customer will ramp up spending on network evolution in '26 and '27, and that will drive growth. But I guess what gives you confidence in growth beyond that upgrade cycle? Maybe if you can just break down the key drivers of growth beyond '26, calendar '26, that would be helpful. And then I have a follow-up.
Sumit Kumar: All right. Thanks, Alex. Yes. Of course, that's a very meaningful program as we've talked about and with our lead customer and what will happen over the next several years there. I think that focusing there, that cycle is a significant wholesale upgrade that's happening to the cable network. I think what sometimes gets lost in the picture is that there is continuous segmentation activity and expansion activity that occurs for all operators. So it's not a start-stop type of program, it will tail off into a more regular run rate type of scenario. And another thing that I think we like people to understand is that only about 50% of our business today is in cable access. So we're already on the path of diversifying business. So we have a whole set of customers when I talk about the 147 engagements we have for cable and fiber access that are also in their own cycles of moving to the upgrade. We've had these lead Tier 1s in the whole industry that have led the timing in some very scaled programs, but very typical of DOCSIS upgrades across the industry is that we will have multiple other customers come into the fold after these large Tier 1s start to ramp back down to more of a run rate scenario. And then the fiber access and vCMTS are incremental to our portfolio. Fiber access in the sense of we've added XGS-PON, much larger TAM. We've been a leader in 10-gig EPON fiber-to-the-home to this point. And with this much larger TAM in XGS, we announced that we had the first customer win today. Our differentiation should come into play and give us a good market share in that much larger TAM. So we thought about this and the profile still sets itself up between the new customer additions, the fiber expansion, the addition of vCMTS to lead us to a sustained growth scenario after this next couple of years of very strong growth that are anchored by our lead customer.
Alexandre Ryzhikov: That's very helpful. I guess maybe specifically on vCMTS, I think you still included in your press release the TAM for that business the estimate from Dell'Oro for $350 million. Are your expectations around market share, call it, in 2029, still the same as they've been previously? Do you think you can capture 1/4 of this market? I know currently, essentially, it's a single player has all of it. Maybe just help me understand your expectations today around the opportunity there for you.
Sumit Kumar: Yes. No, great question. I think like we said and like you reiterated, the market is about $350 million, it will reach by 2029. There are only effectively 3 viable vendors in the space, us being one of them. We have our lead win with Cox. And typically, in every segment that we participated in, we have been successful and we have the track record of building this meaningful market share. The IP that we brought into bear originally started in our MAC PHY platforms that we've put into the Entra Cloud and virtualized in vCMTS. We've been a leader in MAC PHY for years now. That translates to a reasonable expectation between what we're doing with Cox, between these other engagements that we've already built a significant number of them for vCMTS and the natural timing of the rest of the market as it grows to $350 million. I think we've seen that it's very common to expect that a player like us when there's only 3 in the market and the customer engagements we have is going to have a respectable market share.
Alexandre Ryzhikov: Great. And then my final question on capital allocation. I know you've talked about prioritizing debt repayment. But if I think about just the multiple on the numbers that you've shared today on '26 EBITDA, you're trading at a huge discount to all of your peers. So why not be more aggressive on debt repurchases? I know the volume is very low, but why not explore NCIB or some other type of share repurchase given where the market is valuing you today?
Sumit Kumar: Yes. No, thanks for pointing that out. And of course, we agree that there's -- we have opportunities to the upside in the valuation. I think that fundamentally, that pathway from our growing performance is going to provide an avenue. I think, as Judd mentioned, we have been focused on bringing down our leverage and our debt position, and we see that happening relatively significantly in these next 12 months of the P&L performance and the EBITDA delivery. So that should open up the opportunity to explore other uses of capital. And one of the topics that does tend to gain the thought process is should we look at share repurchases. We haven't done any significant M&A in a while either. That would be the other avenue to turn to. But our first focus is on the cash generation, and that is expected to be there.
Operator: [Operator Instructions] as there appears to be no further questions, this concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.