CommScope (COMM) Q3 2025: EBITDA Margin Hits 24.7% as DOCSIS and Wi-Fi 7 Cycles Accelerate

October 30, 2025 | By EarningsIQ Research

CommScope delivered record EBITDA margin and robust top-line growth, powered by new product cycles in DOCSIS 4.0 and Wi-Fi 7, while executing a transformational portfolio shift with the CCS divestiture pending. The quarter highlights strong execution across core segments and signals a multi-year upgrade runway, but investors should monitor the sustainability of demand and competitive dynamics as the business transitions. Guidance was raised on the back of segment outperformance and improved cash generation visibility into year-end.

Summary

• Margin Expansion Sets New Benchmark: Operational leverage and product mix drove record EBITDA margin for the company.
• DOCSIS and Wi-Fi 7 Upgrades Fuel Growth: Early-stage technology cycles underpin segment recovery and pipeline strength.
• Portfolio Realignment to Unlock Value: CCS sale on track, positioning RemainCo for deleveraging and capital returns.

Performance Analysis

CommScope reported a standout quarter, with consolidated net sales of $1.63 billion and adjusted EBITDA of $402 million, reflecting a 51% and 97% year-over-year increase, respectively. The company’s adjusted EBITDA margin reached 24.7%, the highest since the ARIS acquisition, as all segments contributed to the upside. RemainCo, which will comprise ANS (Access Network Solutions) and Ruckus after the pending CCS divestiture, posted $516 million in net sales (49% YoY growth) and $91 million in adjusted EBITDA, up 95% from the prior year, with margin expansion to 17.5%.

ANS sales surged 77% as DOCSIS 4.0 amplifier and node shipments accelerated, particularly with Comcast’s FDX deployment, while Ruckus benefited from Wi-Fi 7 product launches and subscription momentum, driving 15% revenue growth. CCS, the soon-to-be-divested segment, delivered $1.1 billion in revenue and $312 million in EBITDA, reinforcing its cash flow profile ahead of the transaction close. Operating cash flow reached $151 million, and free cash flow was $135 million, bolstering liquidity to $705 million.

• DOCSIS 4.0 Product Cycle Drives ANS Rebound: Amplifier and node demand led to triple-digit EBITDA growth in ANS, offsetting legacy product declines.
• Wi-Fi 7 and Ruckus One Gain Traction: New access points and cloud subscriptions supported Ruckus’ margin and pipeline, overcoming prior channel inventory overhang.
• Cash Generation and Liquidity Strengthen: Sequential cash build and improved working capital position set the stage for deleveraging and potential capital returns post-CCS sale.

Order rates and backlog declined sequentially due to seasonality and project timing, but management raised full-year EBITDA guidance for both the consolidated company and RemainCo, reflecting confidence in continued execution and demand visibility.

Executive Commentary

Strategic Positioning

1. Multi-Year Technology Upgrade Cycles

CommScope is in the early innings of major DOCSIS 4.0 and Wi-Fi 7 upgrade cycles, underpinning multi-year demand visibility for both ANS and Ruckus. Management emphasized that DOCSIS upgrades, led by large customers like Comcast, are just beginning and expected to extend over several years. Similarly, the Wi-Fi 7 refresh is in its initial phase, with Ruckus positioned to outpace market growth rates due to new products and expanded sales resources.

2. Portfolio Transformation and Deleveraging

The pending divestiture of the CCS segment to Amphenol is a transformational move, enabling CommScope to repay all existing debt, redeem preferred equity, and return excess cash to shareholders via a special dividend. This shift will leave a leaner, less capital-intensive RemainCo, focused on higher-growth, technology-driven businesses with a stronger balance sheet and improved cash conversion.

3. Innovation and Product Breadth as Differentiators

CommScope’s full-stack approach to DOCSIS 4.0 and leadership in AI-driven network management were highlighted as competitive advantages. The company is the only vendor offering the complete DOCSIS 4.0 access ecosystem, including amplifiers, nodes, and DAA modules, and is actively rolling out AI-enabled products with real-time network intelligence. On the Ruckus side, programmable antennas and cloud-based analytics are driving new customer wins and vertical market expansion.

Key Considerations

This quarter marked a turning point for CommScope as it executes on a dual strategy of capturing technology upgrade cycles and streamlining its business model through divestiture. The focus now shifts to sustaining demand, managing competitive threats, and delivering on capital return promises post-transaction.

Key Considerations:

• DOCSIS and Wi-Fi 7 Cycles Offer Multi-Year Tailwind: Both segments are benefiting from early-stage technology refreshes, but pace and breadth of adoption will be key to sustaining growth.
• Portfolio Focus and Capital Allocation: The CCS sale will unlock significant capital for debt reduction and shareholder returns, but the transition to a smaller RemainCo increases reliance on continued innovation and execution in ANS and Ruckus.
• Competitive Landscape Remains Intense: ANS faces niche and large competitors across product lines, while Ruckus competes with major enterprise networking vendors. Product differentiation and customer ecosystem integration are critical.
• Cash Flow and CapEx Structure Will Improve: RemainCo is expected to be less capital intensive, with normalized working capital and tax outflows, improving free cash flow conversion.

Risks

CommScope’s outlook depends on the sustained strength of DOCSIS 4.0 and Wi-Fi 7 upgrade cycles, which are subject to customer deployment timing and potential macroeconomic or regulatory delays. The transition to a RemainCo structure heightens exposure to competitive threats and execution risk, particularly as legacy revenue declines and innovation cycles shorten. The company’s ability to deliver on capital return promises post-CCS sale remains a key watchpoint.

Forward Outlook

For Q4 2025, CommScope guided to:

• Sequential decline in adjusted EBITDA for RemainCo due to seasonality, especially in Ruckus
• Continued strong cash generation and liquidity build ahead of CCS transaction close

For full-year 2025, management raised guidance:

• CommScope adjusted EBITDA: $1.3 billion to $1.35 billion (up from $1.15 billion to $1.2 billion)
• RemainCo adjusted EBITDA: $350 million to $375 million (up from $325 million to $350 million)

Management cited improved demand visibility, strong product cycles, and cash flow momentum as drivers of the upward revision, while cautioning that Q4 will reflect typical seasonal moderation.

• Special dividend to be determined post-CCS close, with board considering cash position and business performance
• CCS transaction expected to close in Q1 2026, enabling full deleveraging and capital return

Takeaways

CommScope’s Q3 performance and guidance raise reflect early-stage multi-year upgrade cycles and operational discipline, but the transition to a focused RemainCo raises the bar for innovation and sustained execution.

• Upgrade Cycles Drive Outperformance: DOCSIS 4.0 and Wi-Fi 7 adoption are fueling recovery and growth across core segments, positioning the company for continued strength into 2026.
• Portfolio Realignment Unlocks Capital: The CCS divestiture will enable deleveraging and a substantial special dividend, but also concentrates risk in a more focused business model.
• Execution and Demand Visibility Remain Critical: Investors should monitor customer upgrade pacing, competitive responses, and management’s ability to deliver on capital return commitments post-transaction.

Conclusion

CommScope delivered a record quarter, underpinned by technology upgrade cycles and margin expansion, while executing on a transformative divestiture. The setup into 2026 is favorable, but the success of RemainCo will depend on sustaining innovation, demand, and disciplined capital allocation.

Industry Read-Through

CommScope’s results highlight a broader acceleration in network infrastructure investment, with cable operators and enterprises prioritizing DOCSIS 4.0 and Wi-Fi 7 deployments. Vendors positioned with full-stack solutions, AI-driven network management, and cloud-enabled platforms are gaining share, while legacy product lines face ongoing pressure. The CCS divestiture reflects an industry-wide move toward portfolio focus and capital returns, signaling that scale and specialization are increasingly critical in communications infrastructure markets. Peers should expect intensified competition in DOCSIS and enterprise Wi-Fi, as well as rising customer expectations for integrated, software-driven solutions.

COMM Technology Networking Infrastructure DOCSIS Wi-Fi 7 Divestiture Capital Returns