Clearfield focuses on new products to navigate a shifting broadband landscape

Beranek reported that many operators are initiating new multiyear projects, which Clearfield sees as a positive signal that a strong level of demand and commitment exists outside of government funding.

“To ensure we are able to address this trend, we continue to work with our customers to establish programs that provide better mutual visibility going forward and ensure we’re well positioned to meet our customers’ needs,” said Beranek.

Funding and tariffs

Clearfield believes that BEAD contributions will improve revenues but doesn’t expect this to happen until 2026.

“While we acknowledge near-term uncertainties due to the change in the United States administration and associated delays, we are pleased with the program’s initial progress and remain optimistic about its long-term potential,” said Beranek.

Regarding potential tariffs, Beranek reported that Clearfield’s Mexican and U.S. manufacturing sites were designed to provide redundancy cost optimization and dual-sourcing capabilities.

“While we cannot eliminate the potential cost increases of tariffs, our long-term experience managing past tariff impacts enables us to respond quickly and to mitigate any potential cost increases wherever possible,” said Beranek.

Dan Herzog, Clearfield’s CFO, reported that the company is actively monitoring the tariff situation and developing contingency plans but warned that uncertainty has clouded the expectations for the full fiscal year.

Portfolio progress

Consolidated net sales in Clearfield’s first quarter of fiscal 2025 were $35.5 million, a 4% increase year over year. Net loss for the quarter was $1.9 million.

$29.7 million of net sales came from the Clearfield segment, a year-over-year increase of 6%.

“Net sales met our expectations as we generated increased revenue from connected homes, highlighting our continued progress towards becoming a comprehensive portfolio supplier for our customers,” said Herzog. “We anticipate this trend will continue moving towards a two-to-one ratio of connected homes to passed homes as operators prioritize cash flow generation over deployments while awaiting government funding.”

The company’s Nestor segment contributed the remaining $5.8 million of net sales, down 6% year over year.

“While Europe continues to face economic challenges and geopolitical tensions, we are anticipating improved margins but flat annual revenue in our Nestor segment for fiscal year 2025,” said Herzog.

Herzog reported that bottom-line performance and gross margin improvements were driven primarily by lower excess inventory reserve costs, which were, in turn, a result of improved utilization and recoveries of previously reserved inventory.

Order backlog was $26 million at the end of the quarter, a 3.6% increase year over year.

For its second fiscal quarter, Clearfield expects net sales of between $37 million and $40 million. For the full year, the company expects revenues between $170 million and $185 million.