Adtran Holdings Q3 2026 Earnings Call Transcript

Adtran Holdings (NASDAQ:ADTN) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Adtran Holdings’ third-quarter revenue was $281.2 million, a 1% increase year-over-year, supported by a strong performance in the U.S., where optical revenue was up 11% year-over-year.

The company navigated a challenging supply environment that affected its ability to ship products, while maintaining strength in optical and access solutions, particularly in Europe.

Strategic initiatives include focusing on AI-driven automation and expanding in cloud and enterprise markets, with strong growth in hyperscaler customers and double-digit growth in enterprise markets.

Non-GAAP gross margin was 42.1%, benefiting from tariff refunds but affected by higher component costs and product mix pressures.

The future outlook includes fourth-quarter revenue guidance between $272 million and $292 million, with expected non-GAAP operating margin between 1% and 5%, influenced by supply availability and customer project timing.

Full Transcript

OPERATOR

Ladies and gentlemen, thank you for standing by, and welcome to the Adtran Holdings Third Quarter 2026 Earnings Release conference call. After today’s prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. During the course of the conference call, Adtran Holdings representatives expect to make forward-looking statements that reflect management’s best judgment based on factors currently known.

However, these statements involve risks and uncertainties, including the successful development and market acceptance of our products, the ability of our third-party suppliers to supply components and products, our ability to convert our backlog into revenue, our ability to maintain current expected delivery schedules, competitive pricing and acceptance of our products, intellectual property matters, the effect of economic conditions, the impact of tariffs and trade policy, and other risk factors described in our most recent Annual Report on Form 10-K and in our quarterly filings with the Securities and Exchange Commission.

Adtran Holdings assumes no obligation to update any such forward-looking statements. During today’s call, management will refer to certain non-GAAP financial measures. Reconciliations of GAAP to non-GAAP measures and certain additional information are also included in our investor presentation and our earnings release. Adtran Holdings has not provided reconciliations of its second quarter 2026 outlook with regard to non-GAAP operating margins because it cannot predict and quantify without unreasonable effort all the adjustments that may occur during the period.

The investor presentation has been updated and is available for download on the Adtran Holdings Investor Relations website. Hosting today’s call is Tom Stetson Stanton, Adtran Holdings Chief Executive Officer and Chairman of the Board, and Timothy Santo, Senior Vice President and Chief Financial Officer. It is now my pleasure to turn the call over to Tom Stanton, Chief Executive Officer of Adtran Holdings. Sir, please go ahead.

Tom Stanton (Chief Executive Officer)

Thank you, Kara. Good morning, everyone. Adtran Holdings delivered third quarter results slightly below the midpoint of our guidance range while navigating a challenging supply environment. Importantly, the underlying trends of our business remain encouraging. We continue to see strength in optical, growing momentum with hyperscalers, and progress in Europe. Together, these growth drivers are expanding our reach across service provider, cloud providers, and enterprise markets, helping us build a broader and more diversified customer base.

Optical remained a primary growth engine, with revenue increasing 11% year over year and 4% sequentially, supported by particularly strong performance in the U.S. These results are consistent with our expectations entering the year for growth to build throughout 2026. In access and aggregation, revenue grew 5% year over year, led by strength in Europe despite a slowdown with one of our largest customers due to adjustments in timing of ongoing projects.

As we have previously discussed, we are pleased with where we are with that customer and still expect orders to return to normalized levels in Q1 of next year. In Subscriber Solutions, revenue increased 4% sequentially, led by Carrier Ethernet. Demand remains strong as operators continue to expand fiber connectivity to homes, businesses, and critical infrastructure sites, and as expectations for speed and reliability keep rising. Taken together, these results reflect a demand environment that remains solid across our core markets even as supply availability continues to influence timing.

At the same time, AI is reshaping network requirements, driving the need for faster, more secure, and more reliable connectivity. Our strategy remains focused on three key helping service providers build high-speed fiber networks with AI-driven automation, growing our business with cloud providers as they build out AI infrastructure, and expanding our position in enterprise and critical infrastructure. Each represents an important growth opportunity for Adtran Holdings.

I’ll start with service providers. AI is driving growing bandwidth demand as operators connect cloud and AI infrastructure and carry increasing network traffic, leading them to expand network capacity and translating into stronger demand for our optical solutions. That AI build-out is led by hyperscalers, and it’s easy to understand why some are increasing their focus and resources there. We are participating in that growth as well, and as you’ll hear in a moment, but hyperscaler networks don’t exist in isolation.

The growth in and between data centers ultimately extends into the carrier networks that connect them to enterprises, homes, and each other, and that growth can’t reach its full potential unless those networks are upgraded to carry it. So while we are growing with cloud providers, we are deliberately staying focused on the service providers that connect them, where our deep customer relationships and differentiated technology give us a strong position.

And as some competitors turn their attention elsewhere, we intend to capture the opportunity that they create. Higher bandwidth alone, however, is not enough. Networks also need to be secure, resilient, and trusted. This is continuing to increase pressure on high-risk vendor replacement, which remains a key growth driver for the company. Although operators across Europe are already moving away from high-risk vendors, particularly in new deployments, the proposed EU Cybersecurity Act 2, which would establish a stronger framework for securing Europe’s technology supply chains and would accelerate the replacement of high-risk equipment already in networks, our success in Europe demonstrates the strength of our position and we believe we can benefit as these replacement programs expand.

We are also seeing continued investment in access network upgrades to support multi-gigabit services as connected homes require greater speed, reliability, and security. As AI applications move into homes and businesses, the access network increasingly determines the user’s experience. Across the U.S. and Europe, demand for higher-speed broadband continues to drive investment in higher-capacity access networks and CPE, supported in part by broadband programs such as BEAD.

AI is also reshaping how these networks are operated. We introduced AI-driven automation with Mosaic One Clarity and have since augmented those capabilities with Mosaic One Fabric and an expanded suite of Mosaic One agents. These agents are designed to automate routine traffic management tasks and proactively identify and resolve issues. Fabric also gives operators the unique ability to build and deploy their own agents, providing greater autonomy and helping them automate across complex multi-vendor network environments.

The response from operators of all sizes has been extremely positive, and we believe Mosaic One Fabric positions operators to lead this transition. Turning to our second growth area: Cloud and AI Infrastructure. Here our opportunity goes beyond connecting AI infrastructure with carriers. We are positioning Adtran Holdings to participate directly in its build-out with solutions at three critical points in the cloud network architecture. Data center interconnect is where we have long served cloud providers, and we are starting to see the benefits of our investments in this area. Revenue from hyperscaler customers grew more than 200% year over year.

Inside the data center, AI is creating unprecedented bandwidth demand as increasingly large custom clusters of GPUs must be connected to support AI workloads. Building on our innovation in low-power, high-performance optics, we are extending our technology to address this growing opportunity. Our Lightwave 800 development remains on track, with customer trials expected to begin in the first half of next year and production scaling in the second. Customer engagement remains very positive.

At the cloud handoff, where cloud providers connect to service providers or other cloud providers, our Micro Mux Quattro solution is scheduled for release in the first half of 2027. It is generating significant interest from hyperscalers, content providers, and wholesale network providers. Moving to enterprise and critical infrastructure. This remains a higher-growth area for us. Enterprise continues to deliver double-digit year-over-year growth, and we see good momentum as customers invest in higher-speed networks. With a growing focus on security and resiliency, we believe we have one of the most competitive portfolios in the market, with advanced quantum-safe networking capabilities embedded into our optical and Ethernet solutions.

We see this level of security increasingly becoming a fundamental requirement for networks supporting the AI-driven economy. Shifting to product cost and pricing, we continue to operate in a dynamic environment. Reported gross margins benefited from IEA tariff refunds this quarter. On a more normalized basis, higher component costs combined with product and customer mix continued to pressure margins. We continue to work actively with suppliers, implement product redesigns, and pursue pricing adjustments to help offset these pressures.

Looking ahead, we continue to see strength in optical across both service provider and cloud markets, solid growth in enterprise, and additional opportunities in broadband as high-risk vendor replacement programs gain momentum. We remain focused on addressing gross margin pressures, maintaining disciplined expense management, and achieving our long-term target of 10% non-GAAP operating margin. To close, this was a quarter of continued progress across several of our strategic objectives. Our priorities are unchanged: maintaining tight expense control, generating cash, and converting our strong pipeline into revenue. With that, I’ll turn the call over to Tim to review our financial results in greater detail. Tim.

Timothy Santo (Senior Vice President and Chief Financial Officer)

Thank you, Tom, and thank you for all joining us today. Revenue for the quarter was $281.2 million, up approximately 1% from the prior year and in line with the prior quarter. Geographically, US revenue was $128 million, representing approximately 46% of total revenue, up 6% year over year. Non-US revenue was $153.2 million, representing approximately 54% of total revenue and down 4% year over year. By product category, Optical Networking Solutions revenue was $114.5 million, or 41% of total revenue, increasing 11% year over year and 4% sequentially. Access and Aggregation Solutions revenue was $78.5 million, or approximately 28% of total revenue, up 5% year over year but down 10% sequentially. Subscriber Solutions revenue was $88.1 million, or 31% of total revenue, down 13% year over year and up 4% sequentially.

Turning to margins, non-GAAP gross margin was 42.1%, a sequential increase from 40.7% in the second quarter of 2026. Gross margin benefited approximately 200 basis points from IEEPA tariff refunds received during the quarter. Non-GAAP operating expenses were $104.2 million compared to $103.9 million in the second quarter of 2026 and $102.4 million in the third quarter of 2025. We continue to take proactive measures to maintain cost discipline and offset inflationary pressures.

Non-GAAP operating income was $14.1 million, resulting in a non-GAAP operating margin of 5%. This is compared to $15.1 million and 5.4% on a year-over-year basis and $10.6 million and 3.8% on a sequential basis. Non-GAAP tax expense during the quarter was $3.8 million, reflecting an effective non-GAAP tax rate of 31.4%. Non-GAAP net income attributable to Adtran Holdings was $7.1 million, or $0.09 per diluted share, compared to $0.05 in the third quarter of 2025 and $0.04 in the prior quarter.

Turning now to the balance sheet and cash flow, working capital increased during the quarter resulting from higher accounts receivable and inventory, partially offset by increased accounts payable. DSO increased to 77 days, reflecting higher billings and the timing of collections. Inventory increased to $227.4 million and accounts payable increased to $179 million, reflecting purchasing activity in the current supply environment. Operating cash flow was negative $24.5 million during the quarter resulting from negative free cash flow of $39.4 million.

During the quarter, we repurchased approximately $18 million of Adtran Networks SE shares, further reducing the minority ownership and increasing Adtran Holdings ownership to 73.4%. We ended the quarter with $71.7 million of cash, cash equivalents and restricted cash compared to $79.2 million at June 30, 2026. We expect collections to increase and working capital levels to return to a more normalized level in the fourth quarter. Turning to the fourth quarter outlook, we expect revenue to be between $272 million and $292 million and non-GAAP operating margin to be between 1% and 5%, depending on historical seasonality, availability of supply, and timing of large customer projects. I’d like to note that we’ll be participating in the Craig-Hallum Alpha Select Conference in New York on November 17 and plan to attend the 29th annual Needham Growth Conference in January. We hope to see many of you there, and with that I will turn the call back to Tom.

Tom Stanton (Chief Executive Officer)

All right, thanks very much, Tim. Cara, would you like to go ahead and open up to any questions people may have?

OPERATOR

Yes, we will now begin the question-and-answer session. If you would like to ask a question, please press star one to raise your hand, and to withdraw your question, press star one again. We just ask that you pick up your handset when asking a question to allow for optimum sound quality, and if you’re muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Irvin Liu from Evercore ISI.

Your line is open. Please go ahead.

Irvin Liu (Analyst)

Hi, good morning, and thank you for the question. I had one and a follow-up. First, Tom, are you able to quantify the revenue impact, if any, related to the current supply environment? Just, in other words, has the availability of supply impacted your ability to ship product, or has supply been mostly a cost headwind so far?

Tom Stanton (Chief Executive Officer)

No, it definitely impacted our ability to ship product. It did the last couple of quarters. It has, and we continue to see it be something that we’re having to manage around. But, you know, I would say there were tens of millions of dollars we could have shipped if we had more supply.

Irvin Liu (Analyst)

Got it. Thank you. And then for my follow-up, I understand you typically guide one quarter at a time, but to the extent that you can, are you able to provide any sort of preliminary thoughts into 2027? Should we still expect high-risk vendor replacement to be a tailwind, and, you know, does the BEAD program become more meaningful, and just how are you thinking about supply and perhaps contribution from the Lightwave 800 or MicroMux Quattro?

Tom Stanton (Chief Executive Officer)

Sure, that’s a bunch of questions. So let me start with just kind of BEAD will be stronger next year than this year. We’re just kind of getting started, and we expect that to be kind of a multi-year program. The vendor replacement in Europe is just an ongoing continual thing. I think there’s a general belief—and when I say that, that’s not just Adtran speaking—there’s a general belief that activity around vendor replacement will pick up, and that’s because of the legislation CSA 2 that’s being right now negotiated in Europe.

And current thoughts are that that will be finalized probably early next year. That itself kind of puts some specific laws in place that continue to drive, you know, positive pressure towards getting that vendor replacement done. As far as Lightwave, I mentioned it in my comments. We expect to be able to ship it. It’ll be towards the tail end of next year where we expect really meaningful supply availability, and we will be trialing that in the first half. Quattro is about six months ahead of that, so we should be in production right around the turn of the year. So those should be positive. They will be, because they’re all incremental positive contributors to us. I see right now the environment we’re in, which is very much a supply-constrained environment, continuing on.

So I think our biggest hurdles for next year, our biggest headwind for next year, is just going to be continuing to get enough supply.

Irvin Liu (Analyst)

Got it. Thank you for the color. Appreciate it.

Tom Stanton (Chief Executive Officer)

Okay. All right.

OPERATOR

Your next call comes from the line of Ryan Koontz with Needham. Your line is open. Please go ahead.

Jeff Hobson (Analyst)

Hi, this is Jeff Hobson on for Ryan. Thank you for the question. Just trying to understand, is there any specific component that’s hard to get a hold of, and has that been changing over the past couple quarters, or it’s the same cast of components?

Tom Stanton (Chief Executive Officer)

I’d say generally the same ones that were very problematic coming into the year or last quarter continue to be problematic, and that’s typically optics—lasers, pump lasers, just about many pieces of our optics solution. There are some semiconductor shortages or tightness, and of course we’re seeing price inflation in semiconductor as well. Memory continues to be a problem. I had mentioned, I believe on the last call, that although that’s been problematic, at least it seems stable in that you can get supply, and I would still say that that’s true.

I would say the only change from, let’s say, now versus six months ago is those components are difficult, but at the same time you’re seeing a new base of components that are—just lead times are extending, and PC boards is a good example of that. Where we’ve traditionally never seen PC boards—even in the downturn, the supply crisis—we didn’t see this kind of tightness in PC boards. So us being able to forecast better and continue to reach out with POs farther into the cycle is becoming more important.

Jeff Hobson (Analyst)

Got it. That’s very helpful. And maybe just in Europe, any update on just general RFP activity that you expect to, you know, translate to revenue over the next 12 months?

Tom Stanton (Chief Executive Officer)

Yeah, we’ve got ongoing— in fact, we just had one submitted yesterday of fairly good size. So yeah, I mean this, you know, there are multiple components that have to be replaced or that have to be first resourced and then replaced. And there are—actually, if I think about just the one yesterday, that was a full-out replacement over four years. So that activity is just ongoing.

Jeff Hobson (Analyst)

Very helpful. Thank you for the questions.

OPERATOR

Your next question comes from the line of Michael Genovese with Rosenblatt Securities. Your line is open. Please go ahead.

Tom Stanton (Chief Executive Officer)

Yeah, good question. I think without a doubt the overarching thing is supply cost and increases in our supply cost. We did get hurt some by mix—as some of you know, we’ve got some of our European business that doesn’t kick back on into Q1. There’s a particular mix associated with that. But I’m going to tell you, just generally speaking, I mean, you know, it’s 80–90% supply cost. We wouldn’t be having this discussion if we didn’t have the acceleration in supply cost.

OPERATOR

Your next question comes from the line of Christian Schwab with Craig-Hallum. Your line is open. Please go ahead.

Christian Schwab (Analyst)

Thanks for taking my question, Tom. I just would like an explanation with some semblance of clarity, if you can provide it, on attaining eventually your 10% non-GAAP operating margin target. You know, it sounds like maybe that’s passing on supply costs or mix or etc. I’m just wondering if you can elaborate on—we haven’t operated at that in quite some time—just the steps that we can take that are under your control to get there, I guess is what I’m asking.

Tom Stanton (Chief Executive Officer)

Yeah. Good—I mean, that’s a fair question. So, you know, the thing that’s hurting us now that’s kind of out of what our plan was is the impact on gross margins. We are stepping through price increases, and we have new redesigns that are coming online. In fact, we have some of them that will be coming online early next year, both in the optics space and in the CPE space. Those will help. The question is: what does the supply chain do between now and then, and, you know, are we able to continue to actually make up ground or just continue in the position that we’re in today?

We are also passing on price increases. We have a price increase that has been put in effect—just a recent increase that covers about 70% of our customers—and the rest of them will be coming online in early next year. So we’re continuing to make those movements. And the real answer to your question: it’s very difficult to forecast that gross margin. We do think mix shift will be better next year. We think that our optical sales and access will benefit from increased sales next year, which is typically positive to gross margins.

But yeah, that’s really the question. I mean, our levers are two: we have operating expense, to the extent that we control that, and then we have gross margins. And gross margins—we continue to do the pieces we can do on our side, but there’s a piece that is out of our control, which is the supply chain cost itself, or the component cost itself. Yeah, I’m not really ready to forecast next year, but we have two pieces that are within our control.

Christian Schwab (Analyst)

Great. Thank you. No other questions.

OPERATOR

Your next question comes from the line of Dave Kang with B. Riley. Your line is open. Please go ahead.

Dave Kang (Analyst)

Yes, first question is on the hyperscaler segment. It was up 20% year over year. Just wondering how it performed sequentially. And what is that in terms of percentage of revenue?

Tom Stanton (Chief Executive Officer)

I don’t think we actually break that out as a percentage of revenue. I think last quarter. Tim, can you help me here? Last quarter it was up. I do have. I think it was up about 100% year over year. Last quarter you keep growing 100 and 200%. It’s going to be meaningful no matter what. But you have any help? Yeah, we can.

Dave Kang (Analyst)

Take that offline then if you don’t. Great. Just under, you know, micromarks and LPO activities. Just wondering how those trials are, are progressing. And have you added any new customers trialing your products, data center products?

Tom Stanton (Chief Executive Officer)

Yeah, we have some OEMs as well as some hyperscalers themselves. Some of them have pushed OEMs to come our way for both of those products. The Quattro right now we have some units that are kind of very early units that are out in testing and Lightwave, not yet. So I would expect that though, early in Q1,

Timothy Santo (Senior Vice President and Chief Financial Officer)

Hyperscaler, quarter over quarter was about 20%.

Dave Kang (Analyst)

Oh, 20%, got it. So it’s, I think last quarter you said it was about 10% of revenues, so. So it should be a little bit higher than 10% for third quarter, sounds like

Tom Stanton (Chief Executive Officer)

That’s right. Yeah.

Dave Kang (Analyst)

Yeah. Okay. And my last question is on the access segment. Just can you talk about seasonality? I mean, should we. For next year, should we expect, you know, typical first half stronger than second half? Is that how we should think about seasonality?

Tom Stanton (Chief Executive Officer)

Yeah, I’m going to have to take a little bit out of our norm. So first of all, seasonality in the fourth quarter’s access is typically down. Then it typically comes back up in first quarter. It is. There is. We have a couple of customers that drive that number pretty significantly. Being as one of those customers is really not buying a lot in Access and AG through the end of this year. We would expect the first half of next year to be fairly strong.

It’s too early for me to talk about the second half of next year.

Dave Kang (Analyst)

Got it. Thank you.

OPERATOR

Your next question comes from the line of George Nautter with Wolfe Research. Your line is open. Please go ahead.

George Nautter (Analyst)

Hey guys, I just had one question about securing supplies. So it sounded like on the Lightwave product you’d start to ramp really second half next year. Are you securing supply for that today? Because I know some lead times on some products or components can be a year or plus. I was just wondering how you’re navigating the environment from that perspective.

Tom Stanton (Chief Executive Officer)

Yeah, we’re securing supply commitments, so we’re trying to secure capacity. But and to be, to be, you know, very honest here, it’s the tail end of next year, so it’s not. Don’t expect a whole lot of shipments in Q3 for Lightwave, but we are securing commitments for capacity.

George Nautter (Analyst)

Got it. Thanks so much.

OPERATOR

Your next question comes to line of Bill Dazella with Titan Capital Management. Your line is open. Please go ahead.

Bill Dazella (Analyst)

Thank you. Let me start with the high risk vendor. Would you please discuss in more detail the legislation that’s taking place in Europe and the timing of that legislation coming to fruition and the implications of it, not only in terms of the replacement that would need to be done, but the timeframe at which it would need to be accomplished by.

Tom Stanton (Chief Executive Officer)

Yeah, so the legislation does a few things. First of all, it’s been in the works now for well over a year, so hopefully we’re coming to the end of the process. There is some proposed language that you can find. I think if you do a search on the internet right now, you can see some of the proposed language that’s currently contemplated. There are a few things that are still yet undetermined that aren’t agreed upon. But in general, the concept is you stop buying and then you have a period of time by which you have to remove and replace all of the offending vendor equipment in your network.

The legislation itself and getting that put into law, I think, of course, is a positive catalyst just for ongoing business. The dates associated with full replacement, like I said, aren’t decided yet. But right now I think it’s generally contemplated to be around 2035 to actually have all the equipment ripped out, but the, you know, no new equipment. It would be effectively right away.

Bill Dazella (Analyst)

Great, that’s helpful. And given the pace that legislation can move, even though it’s a year into the process, is the implication that there may be another year or more, or do you see momentum behind this and apologies that I haven’t paid close of attention to just how this is picking up or not?

Tom Stanton (Chief Executive Officer)

Yeah, no problem. I would, I would tell you, all of our investors that this is important legislation for Adtran Holdings. I mean, we are the biggest beneficiary of this legislation being approved. You’re right about the, you know, it being a, it is an EU rule. Right. So it’s not just one country. So there are multiple countries that have a vote. The current thought is, and I would say that that’s kind of the way that the participants are viewing it is that it will be done early next year.

But having said that, this is multi government, you know, legislation. So it’s, it’s not, it’s something you wouldn’t want to bet on. They say, okay, that’s kind of. But, but that, that is literally the current time frame is actually first half of next year.

Bill Dazella (Analyst)

Okay, that is helpful. And taking this one step further, the stop buying the high risk vendors. How, how much revenue do the high risk vendors currently earn each year? And really the spirit of that question is trying to understand the magnitude that we’re talking about here at this point in, I guess in 2026 and 7.

Tom Stanton (Chief Executive Officer)

Yeah, so we actually commission independent study to actually look at that. And in, I think it was, yeah, in 2025, that number was somewhere in the mid 800 millions of directly relatable to our equipment on an annual basis. And I don’t think that that’s, I would still have to think we’re in the same ballpark at this point. And you know, the bigger piece, of course is if they do get this legislation or when they do get this legislation approved, there’s a solid $10 billion worth of equipment that’s got to be replaced.

Bill Dazella (Analyst)

That’s helpful and really appreciate all that color. Tom. And then given that we’re only 35 minutes into the call, I am going to ask you to dive into more detail, if you would, on the data cent activity in terms of what you all are doing today and then the magnitude of the opportunity that your new products could lead to if they are as successful as you think they will be.

Tom Stanton (Chief Executive Officer)

Yeah, so what we’re doing today is mainly data center intraconnect or. Right. So it’s actually connecting data centers to data centers. So I guess that would be interconnect and that’s using our ongoing optical products. I will say that it’s being also impact, it’s also impacting our carrier cells. So we think we’re seeing some really good activity here in the US and in some portions of Europe where you have carriers that are really trying to make sure that they upgrade their network to be able to meet data center traffic requirements.

And one of them here in the US is very vocal and you know, our business is definitely picking up because of that. But we also are in data center upgrades where the hyperscalers themselves are upgrading. And we have one customer that of course is materially larger than the rest that’s ongoing. We expect that actually that business to continue to grow meaningfully. The new intersection point for us is these two chips. The LPO is huge. We have strong interest in that product. And I’m trying not to overhang myself here, but we have strong interest in that product.

And now that product is not singular. We have different versions of that product that will be coming out over the next probably three years or so. But we’ve got very good interest on our very first. So, you know, it’s, you know, anything that has to do with hyperscalers, you can typically, it’s typically tens to hundred millions of dollars. So it’s, it would be very beneficial for the company when we’re successful there.

Bill Dazella (Analyst)

And thank you. And one additional question, and I do promise I’ll step away. The interest, as you said, is very strong. Is that coming from one or two potential customers or is it much more broad based than that?

Tom Stanton (Chief Executive Officer)

On the Lightwave, it is really large data center owners, so you know, there’s a finite number of them. On the Quattro, it is pretty much across the board. It’s carriers, it is hyperscalers, it’s neo scalers, it’s mofi type customers. So it’s across the board. It’s a much broader product, it’s a much broader customer set. Okay,

Bill Dazella (Analyst)

Great. Thank you again.

Tom Stanton (Chief Executive Officer)

Okay, I think we are. I see a question. Queue is empty at this point. So thank you very much for everybody joining us and we look forward to talking to you next quarter.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.