Item 8. Financial Statements and Supplementary Data
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Financial Statements
Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42 )
56
Consolidated Statements of Operations
59
Consolidated Statements of Comprehensive Income (Loss)
60
Consolidated Balance Sheets
61
Consolidated Statements of Cash Flows
62
Consolidated Statements of Stockholders’ Deficit
63
Notes to Consolidated Financial Statements
64
55
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Vistance Networks, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Vistance Networks, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), stockholders’ deficit and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 25, 2 026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Valuation of Goodwill
Description of the Matter
As more fully described in Note 5 to the consolidated financial statements, at December 31, 2025, the Company’s goodwill was $764.6 million, of which $268.7 million related to the Aurora reporting unit. The Company’s goodwill is initially assigned to its reporting units as of the acquisition date.
Goodwill is tested for impairment at least annually at the reporting unit level. The Company performed its annual goodwill impairment test in the fourth quarter of 2025. As a result of the annual goodwill impairment test, no impairment charge was measured, as the estimated fair value of the Aurora reporting unit was greater than the carrying value.
Auditing management’s goodwill impairment test was complex and highly judgmental due to the significant estimation required in determining the fair value of the Aurora reporting unit. In particular, the fair value estimate was sensitive to changes in significant assumptions, such as the estimated discount rate, projected revenue growth rate and projected EBITDA margin percentage, which are affected by expectations about future market or economic conditions.
56
How We Addressed the Matter in Our Audit
We evaluated the Company’s assessment of the impairment of goodwill for the Aurora reporting unit. We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risks of material misstatement relating to the annual goodwill impairment test for this reporting unit, including controls over management’s development and review of the significant assumptions discussed above.
To test the estimated fair value of the Aurora reporting unit, we performed audit procedures with the assistance of our valuation specialists that included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis. We evaluated the Company’s estimated discount rate methodology and developed independent ranges of reasonable discount rates. We compared the significant assumptions of projected revenue growth rates and projected EBITDA margin percentages used by management to current industry and economic trends, changes to the Company’s business model, customer base or product mix and other relevant factors. We also evaluated the reasonableness of the guideline public companies used to develop the fair value estimate of the Aurora reporting unit. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting unit that would result from changes in the assumptions. We also evaluated the related goodwill disclosures included in Note 5 to the consolidated financial statements.
Incomes Taxes - Valuation Allowance
Description of the Matter
As more fully described in Note 13 to the consolidated financial statements, at December 31, 2025, the Company recognized deferred tax assets related to deductible temporary differences and carryforwards of $1,880.0 million, net of valuation allowances of $97.0 million. Deferred tax assets are reduced by a valuation allowance if, based on the weight of all available evidence, in management’s judgment, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.
Auditing management’s assessment of the realizability of deferred tax assets was complex and judgmental due to the estimation required in determining whether sufficient projected future taxable income supports the realization of the Company’s existing deferred tax assets.
How We Addressed the Matter in Our Audit
We evaluated the Company’s assessment of the realizability of deferred tax assets, with the assistance of our income tax professionals. We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risks of material misstatement relating to the realizability of deferred tax assets, including controls over management’s development and review of the projected future taxable income.
To test the realizability of deferred tax assets, we performed audit procedures that included, among others, evaluating whether the amount and sources of management’s projected future taxable income would be sufficient to utilize the deferred tax assets under the relevant tax laws. We evaluated the assumptions used by the Company to develop the projected future taxable income and tested the completeness and accuracy of the underlying data. We also evaluated the related income tax disclosures included in Note 13 to the consolidated financial statements.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2008.
Charlotte, North Carolina
February 25, 2026
57
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Vistance Networks, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Vistance Networks, Inc.’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Vistance Networks, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), stockholders’ deficit and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated February 25, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Charlotte, North Carolina
February 25, 2026
58
Vistance Networks, Inc.
Consolidated Statements of Operations
(In millions, except per share amounts)
Year Ended December 31,
2025
2024
2023
Net sales
$
1,931.6
$
1,382.6
$
1,863.8
Cost of sales
975.7
777.5
963.5
Gross profit
955.9
605.1
900.3
Transition service agreement income
35.5
24.5
—
Operating expenses:
Selling, general and administrative
497.4
472.0
512.4
Research and development
283.5
247.5
318.8
Amortization of purchased intangible assets
138.4
165.1
227.0
Restructuring costs, net
19.7
36.7
29.4
Asset impairments
—
—
472.3
Other
4.8
—
—
Total operating expenses
943.8
921.3
1,559.9
Operating income (loss)
47.6
( 291.7
)
( 659.6
)
Other income (expense), net
( 9.4
)
7.9
75.5
Interest income
16.7
10.9
11.1
Income (loss) from continuing operations before income taxes
54.9
( 272.9
)
( 573.0
)
Income tax (expense) benefit
269.4
66.9
( 79.8
)
Income (loss) from continuing operations
324.3
( 206.0
)
( 652.8
)
Income (loss) from discontinued operations, net of income tax
(expense) benefit of $ 865.1 , $( 213.6 ) and $ 99.6 , respectively
1,959.4
( 109.5
)
( 854.0
)
Net income (loss)
2,283.7
( 315.5
)
( 1,506.8
)
Series A convertible preferred stock dividends
( 68.9
)
( 65.2
)
( 61.8
)
Net income (loss) attributable to common stockholders
$
2,214.8
$
( 380.7
)
$
( 1,568.6
)
Basic:
Earnings (loss) from continuing operations per share
$
1.16
$
( 1.27
)
$
( 3.39
)
Earnings (loss) from discontinued operations per share
8.93
( 0.51
)
( 4.05
)
Earnings (loss) per share
$
10.09
$
( 1.78
)
$
( 7.44
)
Diluted:
Earnings (loss) from continuing operations per share
$
1.11
$
( 1.27
)
$
( 3.39
)
Earnings (loss) from discontinued operations per share
8.52
( 0.51
)
( 4.05
)
Earnings (loss) per share
$
9.63
$
( 1.78
)
$
( 7.44
)
Weighted average shares outstanding:
Basic
219.5
214.4
210.9
Diluted
230.0
214.4
210.9
See notes to consolidated financial statements.
59
Vistance Networks, Inc.
Consolidated Statements of Comprehensive Income (Loss)
(In millions)
Year Ended December 31,
2025
2024
2023
Comprehensive income (loss):
Net income (loss)
$
2,283.7
$
( 315.5
)
$
( 1,506.8
)
Other comprehensive income (loss), net of tax:
Foreign currency translation gain (loss)
227.2
( 76.4
)
37.9
Defined benefit plans:
Change in unrecognized loss
( 0.5
)
( 0.4
)
( 0.5
)
Change in unrecognized net prior service credit
( 2.7
)
( 0.2
)
0.4
Gain (loss) on hedging instruments
1.8
( 0.8
)
( 8.2
)
Total other comprehensive income (loss), net of tax
225.8
( 77.8
)
29.6
Total comprehensive income (loss)
$
2,509.5
$
( 393.3
)
$
( 1,477.2
)
See notes to consolidated financial statements.
60
Vistance Networks, Inc.
Consolidated Balance Sheets
(In millions, except share amounts)
December 31,
2025
2024
Assets
Cash and cash equivalents
$
754.4
$
404.1
Accounts receivable, net of allowance for doubtful accounts
of $ 1.6 and $ 1.6 , respectively
350.4
252.2
Inventories, net
310.4
403.0
Prepaid expenses and other current assets
56.5
89.4
Current assets held for sale
4,324.5
2,335.8
Total current assets
5,796.2
3,484.5
Property, plant and equipment, net of accumulated depreciation
of $ 174.5 and $ 255.8 , respectively
58.6
82.2
Goodwill
764.6
759.6
Other intangible assets, net
839.1
979.3
Deferred income taxes
1,765.9
431.5
Other noncurrent assets
146.6
150.1
Noncurrent assets held for sale
—
2,860.3
Total assets
$
9,371.0
$
8,747.5
Liabilities and Stockholders' Deficit
Accounts payable
$
213.3
$
123.4
Accrued and other liabilities
498.3
457.0
Current liabilities held for sale
783.9
649.3
Total current liabilities
1,495.5
1,229.7
Long-term debt
7,260.2
9,238.4
Deferred income taxes
67.2
90.9
Other noncurrent liabilities
273.5
321.1
Noncurrent liabilities held for sale
—
96.2
Total liabilities
9,096.4
10,976.3
Commitments and contingencies
Series A convertible preferred stock, $ 0.01 par value
1,278.7
1,227.3
Stockholders' deficit:
Preferred stock, $ 0.01 par value: Authorized shares: 200,000,000 ;
Issued and outstanding shares: 1,278,653 and 1,227,328 , respectively,
Series A convertible preferred stock
—
—
Common stock, $ 0.01 par value: Authorized shares: 1,300,000,000 ;
Issued and outstanding shares: 223,260,316 and 215,887,001 ,
respectively
2.4
2.3
Additional paid-in capital
2,487.9
2,514.2
Accumulated deficit
( 3,040.8
)
( 5,324.5
)
Accumulated other comprehensive loss
( 118.7
)
( 344.5
)
Treasury stock, at cost: 18,665,426 shares and
15,647,303 shares, respectively
( 334.9
)
( 303.6
)
Total stockholders' deficit
( 1,004.1
)
( 3,456.1
)
Total liabilities and stockholders' deficit
$
9,371.0
$
8,747.5
See notes to consolidated financial statements.
61
Vistance Networks, Inc.
Consolidated Statements of Cash Flows (1)
(In millions)
Year Ended December 31,
2025
2024
2023
Operating Activities:
Net income (loss)
$
2,283.7
$
( 315.5
)
$
( 1,506.8
)
Adjustments to reconcile net income (loss) to net cash generated by
operating activities:
Depreciation and amortization
277.0
370.5
561.2
Equity-based compensation
42.7
29.1
47.3
Deferred income taxes
( 1,350.4
)
65.0
( 180.5
)
Asset impairments
—
19.2
1,244.0
(Gain) loss on disposal of discontinued operations
( 869.0
)
27.9
—
Changes in assets and liabilities:
Accounts receivable
( 281.3
)
( 137.6
)
471.9
Inventories
( 92.0
)
152.5
391.3
Prepaid expenses and other current assets
9.2
( 55.9
)
45.1
Accounts payable and other accrued liabilities
325.7
143.5
( 720.2
)
Other noncurrent assets
( 49.0
)
( 20.6
)
( 27.4
)
Other noncurrent liabilities
( 37.8
)
( 18.1
)
75.5
Other
64.1
13.1
( 104.1
)
Net cash generated by operating activities
322.9
273.1
297.3
Investing Activities:
Additions to property, plant and equipment
( 70.3
)
( 25.3
)
( 60.7
)
Proceeds from sale of property, plant and equipment
10.0
0.2
71.2
Net proceeds from divestitures
2,041.9
—
—
Acquisition of a business
—
( 45.1
)
—
Other
—
13.0
20.4
Net cash generated by (used in) investing activities
1,981.6
( 57.2
)
30.9
Financing Activities:
Long-term debt repaid
( 2,049.0
)
( 4,338.6
)
( 32.0
)
Long-term debt repurchases
—
—
( 142.6
)
Long-term debt proceeds
50.0
4,350.0
—
Cash paid for debt discount
—
( 59.4
)
—
Debt issuance costs
( 5.7
)
( 33.1
)
—
Dividends paid on Series A convertible preferred stock
( 17.6
)
—
—
Tax withholding payments for vested equity-based compensation awards
( 31.3
)
( 1.9
)
( 9.1
)
Other
—
—
2.0
Net cash used in financing activities
( 2,053.6
)
( 83.0
)
( 181.7
)
Effect of exchange rate changes on cash and cash equivalents
8.6
( 13.4
)
( 0.8
)
Change in cash and cash equivalents
259.5
119.5
145.7
Cash and cash equivalents at beginning of period
663.3
543.8
398.1
Cash and cash equivalents at end of period
$
922.8
$
663.3
$
543.8
(1) The cash flows related to discontinued operations have not been segregated. Accordingly, the Consolidated Statements of Cash Flows include the results of continuing and discontinued operations.
See notes to consolidated financial statements.
62
Vistance Networks, Inc.
Consolidated Statements of Stockholders' Deficit
(In millions, except share amounts)
Year Ended December 31,
2025
2024
2023
Number of common shares outstanding:
Balance at beginning of period
215,887,001
212,108,634
208,371,426
Issuance of shares under equity-based compensation plans
10,391,438
5,001,544
5,434,639
Shares surrendered under equity-based compensation plans
( 3,018,123
)
( 1,223,177
)
( 1,697,431
)
Balance at end of period
223,260,316
215,887,001
212,108,634
Common stock:
Balance at beginning of period
$
2.3
$
2.3
$
2.2
Issuance of shares under equity-based compensation plans
0.1
—
0.1
Balance at end of period
$
2.4
$
2.3
$
2.3
Additional paid-in capital:
Balance at beginning of period
$
2,514.2
$
2,550.4
$
2,542.9
Issuance of shares under equity-based compensation plans
( 0.1
)
( 0.1
)
—
Equity-based compensation
42.7
29.1
47.3
Dividends on Series A convertible preferred stock
( 68.9
)
( 65.2
)
( 61.8
)
Other
—
—
22.0
Balance at end of period
$
2,487.9
$
2,514.2
$
2,550.4
Accumulated deficit:
Balance at beginning of period
$
( 5,324.5
)
$
( 5,009.0
)
$
( 3,502.2
)
Net income (loss)
2,283.7
( 315.5
)
( 1,506.8
)
Balance at end of period
$
( 3,040.8
)
$
( 5,324.5
)
$
( 5,009.0
)
Accumulated other comprehensive loss:
Balance at beginning of period
$
( 344.5
)
$
( 266.7
)
$
( 296.3
)
Other comprehensive income (loss), net of tax
225.8
( 77.8
)
29.6
Balance at end of period
$
( 118.7
)
$
( 344.5
)
$
( 266.7
)
Treasury stock, at cost:
Balance at beginning of period
$
( 303.6
)
$
( 301.7
)
$
( 292.6
)
Net shares surrendered under equity-based compensation plans
( 31.3
)
( 1.9
)
( 9.1
)
Balance at end of period
$
( 334.9
)
$
( 303.6
)
$
( 301.7
)
Total stockholders' deficit
$
( 1,004.1
)
$
( 3,456.1
)
$
( 3,024.7
)
See notes to consolidated financial statements.
63
Vistance Networks, Inc.
Notes to Consolidated Financial Statements
(In millions, unless otherwise noted)
1. BACKGROUND AND DESCRIPTION OF THE BUSINESS
Effective January 14, 2026, the Company changed its legal name from CommScope Holding Company, Inc. to Vistance Networks, Inc. Vistance Networks, Inc., along with its direct and indirect subsidiaries (the Company), is a global provider of infrastructure solutions for communication, data center and entertainment networks. The Company’s solutions for wired and wireless networks enable service providers including cable, telephone and digital broadcast satellite operators and media programmers, to deliver media, voice, Internet Protocol (IP) data services and Wi-Fi to their subscribers and allow enterprises to experience constant wireless and wired connectivity across complex and varied networking environments. The Company’s solutions are complemented by services including technical support, systems design and integration. The Company is a leader in digital video and IP television (IPTV) distribution systems, broadband access infrastructure platforms and equipment that delivers data and voice networks to homes. The Company’s global leadership position is built upon innovative technology, broad solution offerings, high-quality and cost-effective customer solutions, and global manufacturing and distribution scale.
During the years ended December 31, 2023, 2024 and 2025, the Company executed several strategic transactions that are further described in Note 3 and Note 4 of these consolidated financial statements. These transactions included the acquisition of certain assets of Casa Systems, Inc. (Casa), as well as multiple divestitures, including the Home business, the Outdoor Wireless Networks (OWN) segment, the Distributed Antenna Systems (DAS) business unit, the OneCell business, and the Connectivity and Cable Solutions (CCS) segment. Several of these divestitures met the criteria for discontinued operations under Accounting Standard Codification (ASC) 205‑20, Presentation of Financial Statements—Discontinued Operations and "held for sale" classification under ASC 360-10, Impairment and Disposal of Long Lived Assets. Detailed financial information, gain or loss recognition, held for sale measurements, and the related balance sheet, statement of operations, and statement of cash flow impacts are included within those notes.
Segment Renaming
Effective April 1, 2025, following the divestiture of the DAS business unit, the Company renamed its Networking, Intelligent Cellular & Security Solutions (NICS) segment to RUCKUS. The name change did not impact the Company’s operating or reportable segment structure, chief operating decision maker (CODM) reporting or historical segment results. Historical activities occurring prior to the effective date are referenced under the former NICS name.
In connection with the divestiture of the CCS segment, and effective upon the closing of that transaction on January 9, 2026, the Company renamed its Access Network Solutions (ANS) segment to Aurora Networks (Aurora). The name change did not impact the Company’s operating or reportable segment structure, CODM reporting or historical segment results. Historical activities occurring prior to the effective date are referenced under the former ANS name.
Operating Segment Realignments
To better align product oversight with how the business is managed:
• Effective January 1, 2025, a product line was transferred from the RUCKUS (formerly NICS) segment to the Aurora (formerly ANS) segment.
• Effective January 1, 2024, certain product lines were transferred from the CCS segment (which became a discontinued operation in the fourth quarter of 2025) to the Aurora (formerly ANS) segment.
All prior periods presented have been recast to reflect these organizational changes.
The discussions in these consolidated financial statements relate solely to the Company's continuing operations, unless otherwise noted. As a result, the Company is reporting financial performance based on the following remaining reportable segments: RUCKUS and Aurora. For further discussion of the discontinued operations related to the CCS segment, OWN segment, DAS business unit and Home business, see Note 4 in these consolidated financial statements.
64
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Consolidation
The accompanying consolidated financial statements include Vistance Networks, Inc., along with its direct and indirect subsidiaries. All intercompany accounts and transactions are eliminated in consolidation.
Certain prior year amounts have been reclassified to conform to the current year presentation.
Use of Estimates in the Preparation of the Financial Statements
The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States (U.S.) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and their underlying assumptions form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other objective sources. The Company bases its estimates on historical experience and on assumptions that are believed to be reasonable under the circumstances and revises its estimates, as appropriate, when events or changes in circumstances indicate that revisions may be necessary. Significant accounting estimates reflected in the Company’s financial statements include the allowance for doubtful accounts; reserves for sales returns, discounts, allowances, rebates and distributor price protection programs; inventory excess and obsolescence reserves; contingent liabilities; tax valuation allowances; liabilities for unrecognized tax benefits; impairment reviews for investments, property, plant and equipment, goodwill and other intangible assets; and pension and other postretirement benefit costs and liabilities. Although these estimates are based on management’s knowledge of and experience with past and current events and on management’s assumptions about future events, it is at least reasonably possible that they may ultimately differ materially from actual results.
Cash and Cash Equivalents
Cash and cash equivalents represent deposits in banks and cash invested temporarily in various instruments that are highly liquid and have a maturity of three months or less at the time of purchase.
Accounts Receivable and Allowance for Doubtful Accounts
Trade accounts receivable and contract assets for unbilled receivables are stated at the amount owed by the customer, net of allowances for estimated doubtful accounts, discounts, returns and rebates. The Company measures the allowance for doubtful accounts using an expected credit loss model, which uses a lifetime expected loss allowance for all trade accounts receivable and contract assets. To measure the expected credit losses, trade accounts receivable and contract assets are grouped based on shared credit risk characteristics and the days past due based on the contractual terms of the receivable. Contract assets relate to unbilled work in progress and have substantially the same risk characteristics as trade accounts receivable for the same types of contracts. Therefore, the Company has concluded that the expected loss rates for trade accounts receivable are a reasonable approximation of the loss rates for the contract assets.
In calculating an allowance for doubtful accounts, the Company uses its historical experience, external indicators and forward-looking information to calculate expected credit losses using an aging method. The Company assesses impairment of trade accounts receivable on a collective basis, as they possess shared credit risk characteristics which have been grouped based on the days past due.
The expected loss rates are based on the payment profiles of sales over the preceding thirty-six months and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle their trade accounts receivable. Accounts are written off against the allowance account when they are determined to be no longer collectible.
The Company sells certain of its accounts receivable under customer-sponsored supplier financing agreements. Under these agreements, the Company is able to sell certain accounts receivable to a bank at a discount. The Company sold approximately $ 93 million and $ 90 million of trade accounts receivable under these programs during the years ended December 31, 2025 and 2024 , respectively, and the cost of factoring such receivables was not material. The Company derecognizes the accounts receivable on the Consolidated Balance Sheets once sold to the bank, as it retains no interest in and has no servicing responsibilities for them once they have been sold. The cash received from the bank is classified within the operating activities section on the Consolidated Statements of Cash Flows.
65
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
Inventories
Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (FIFO) basis. Costs such as idle facility expense, excessive scrap and re-handling costs are expensed as incurred. The Company maintains reserves to reduce the value of inventory to the lower of cost or net realizable value, including reserves for excess and obsolete inventory.
Assets Held for Sale and Discontinued Operations
The Company reports the results of operations of a business as discontinued operations if a disposal represents a strategic shift that has or will have a major effect on the Company’s operations and financial results when the business is sold, in accordance with the criteria of ASC Topic 205-20, Presentation of Financial Statements—Discontinued Operations (ASC 205-20), and classified as “held for sale”, in accordance with ASC Topic 360-10, Impairment and Disposal of Long Lived Assets (ASC 360-10). For assets (disposal group) held for sale, the disposal group as a whole is measured at the lower of its carrying amount or fair value less cost to sell after adjusting the individual assets of the disposal group, if necessary. The results of discontinued operations are reported in income (loss) from discontinued operations, net of income taxes in the accompanying Consolidated Statements of Operations for the current and prior periods and include any gain or loss recognized on classification as held for sale, or adjustment of the carrying amount or estimated fair value less cost to sell. If the carrying amount of the business exceeds its estimated fair value less cost to sell, a loss is recognized. Assets and liabilities related to a business classified as held for sale that qualifies as a discontinued operation are segregated in the current and prior periods on the Consolidated Balance Sheets. If a business is classified as held for sale after the balance sheet date but before the financial statements are issued or are available to be issued, the business continues to be classified as held and used in those financial statements when issued or when available to be issued .
Derivative Instruments and Hedging Activities
The Company is exposed to risks resulting from adverse fluctuations in commodity prices and foreign currency exchange rates and, historically, interest rates. The Company’s risk management strategy includes the use of derivative financial instruments whenever management determines their use to be reasonable and practical. This strategy does not permit the use of derivative financial instruments for trading or speculation.
The Company periodically uses forward contracts to hedge a portion of its balance sheet foreign exchange re-measurement risk and to hedge certain planned foreign currency expenditures. Unrealized gains and losses resulting from these contracts are recognized in other income (expense), net and partially offset corresponding foreign exchange gains and losses on the balances and expenditures being hedged. These instruments are not designated as hedges for hedge accounting purposes and are marked to market each period through earnings.
The Company has also utilized a hedging strategy to mitigate the interest rate risk from its variable rate debt, associated with its borrowings or debt issued, to fix a portion of the future interest cash flows by designating qualifying receive-variable and pay-fixed interest rate swaps as a cash flow hedge for accounting and financial reporting purposes. Hedge effectiveness was assessed each quarter, and for hedges that meet the effectiveness requirements, changes in fair value were recorded as a component of other comprehensive income (loss), net of tax, and reclassified to interest expense as interest payments were made on the Company’s variable rate debt. For cash flow hedges that are discontinued because the forecasted transaction is no longer probable, the related cumulative gain or loss recorded in accumulated other comprehensive income (loss) is immediately reclassified into earnings. As a result of the sale of the CCS segment that was completed subsequent to fiscal year end on January 9, 2026, the Company repaid, on the closing date of the sale, all outstanding variable rate debt. See Note 19 in these consolidated financial statements for further discussion of the sale of the CCS segment. The Company determined in the fourth quarter of 2025 that the forecasted interest cash flows were no longer probable of occurring. Accordingly, the Company discontinued cash flow hedge accounting for its interest rate swaps during the fourth quarter of 2025 and reclassified the net losses previously recorded in accumulated other comprehensive loss (AOCL), to interest expense, included in income (loss) from discontinued operations, net of income taxes on the Consolidated Statements of Operations. After discontinuation, all subsequent changes in the fair value of the interest rate swaps will be recognized directly in earnings.
The Company has elected and documented the use of the normal purchases and sales exception for normal purchase and sales contracts that meet the definition of a derivative financial instrument.
66
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
Leases
The Company determines if a contract is a lease or contains a lease at inception. Right of use assets related to operating type leases are reported in other noncurrent assets and the present value of remaining lease obligations is reported in accrued and other liabilities and other noncurrent liabilities on the Consolidated Balance Sheets. For the periods presented, the Company does not have any financing type leases.
Operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The majority of the Company’s leases do not provide an implicit rate; therefore, the Company uses the incremental borrowing rates applicable to the economic environment and the duration of the lease, based on the information available at commencement date, in determining the present value of future payments. The right of use asset for operating leases is measured using the lease liability adjusted for the impact of lease payments made prior to commencement, lease incentives received, initial direct costs incurred and any asset impairments. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.
The Company remeasures and reallocates the consideration in a lease when there is a modification of the lease that is not accounted for as a separate contract. The lease liability is remeasured when there is a change in the lease term or a change in the assessment of whether the Company will exercise a lease option. The Company assesses right of use assets for impairment in accordance with its long-lived asset impairment policy.
The Company accounts for lease agreements with contractually required lease and non-lease components on a combined basis. Lease payments made for cancellable leases, variable amounts that are not based on an observable index and lease agreements with an original duration of less than twelve months are recorded directly to lease expense.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Upon application of acquisition accounting, property, plant and equipment are measured at estimated fair value as of the acquisition date to establish a new historical cost basis. Provisions for depreciation are based on estimated useful lives of the assets using the straight-line method. Useful lives generally range from 10 to 35 years for buildings and improvements and 3 to 10 years for machinery and equipment. Expenditures for repairs and maintenance are expensed as incurred. Assets that management intends to dispose of and that meet “held for sale” criteria are carried at the lower of the carrying value or fair value less costs to sell.
Goodwill and Definite-Lived Intangible Assets
The Company recognizes goodwill balances in conjunction with business combinations. Goodwill is assigned to reporting units based on the difference between the purchase price as allocated to the reporting units and the estimated fair value of the identified net assets acquired as allocated to the reporting units.
The Company recognizes definite-lived intangible assets in connection with business combinations and separate asset purchases. In a business combination, intangibles assets are recorded at their respective fair values. For separate asset purchases, intangible assets are capitalized at cost. Subsequent to their acquisition, definite-lived intangible assets are carried at fair values or cost less accumulated amortization and any impairment charges. Amortization is recognized on a straight-line basis over the estimated useful lives of the respective assets, which approximates the pattern that the economic benefits are realized by the Company .
Asset Impairments
Goodwill is tested for impairment annually or at other times if events have occurred or circumstances exist that indicate the carrying value of the reporting unit may exceed its fair value. Property, plant and equipment, definite-lived intangible assets and right of use assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable, based on the undiscounted cash flows expected to be derived from the use and ultimate disposition of the assets. Assets identified as impaired are adjusted to estimated fair value. Equity investments without readily determinable fair values are evaluated each reporting period for impairment based on a qualitative assessment and are then measured at fair value if an impairment is determined to exist. See Note 5 for discussion of asset impairment charges.
67
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
Revenue Recognition
The Company recognizes revenue based on the satisfaction of distinct obligations to transfer goods and services to customers. The Company’s revenue is generated primarily from product or equipment sales. The Company also generates revenue from custom design and installation services as well as bundled sales arrangements that include product, software and services. The Company applies a five-step approach as defined in ASC 606, Revenue from Contracts with Customers, in determining the amount and timing of revenue to be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when a corresponding performance obligation is satisfied. Most contracts with customers are to provide distinct products or services within a single contract. However, if a contract is separated into more than one performance obligation, the total transaction price is allocated to each performance obligation in an amount based on the estimated relative standalone selling price.
Product sales to end-customers or distributors represent over 90 % of the Company’s revenue and are recognized at a point-in-time, which is generally at the point in time when products have been shipped, right to payment has been obtained and risk of loss has been transferred. Certain of the Company’s product performance obligations include proprietary operating system software, which typically is not considered separately identifiable. Therefore, sales of these products and the related software are considered one performance obligation.
License contracts include revenue recognized for the licensing of intellectual property, including software, sold separately without products. Functional intellectual property licenses do not meet the criteria for revenue to be recognized over time, and revenue is most commonly recognized upon delivery of the license/software to the customer.
The Company has service arrangements where net sales are recognized over time. These arrangements include a variety of post-contract support service offerings, which are generally recognized over time as the services are provided, including the following: maintenance and support services provided under annual service-level agreements; “Day 2” professional services to help customers maximize their utilization of deployed systems; and installation services related to the routine installation of equipment ordered by the customer at the customer’s site.
Revenue is measured based on the consideration the Company expects to be entitled based on customer contracts. Sales are adjusted for variable consideration amounts, including, but not limited to, estimated discounts, rebates, distributor price protection programs and returns. These estimates are determined based upon historical experience, contract terms, inventory levels in the distributor channel and other related factors. Adjustments to variable consideration estimates are recorded when circumstances indicate revisions may be necessary. Variable consideration is primarily related to the Company’s sales to distributors, system integrators and value-added resellers.
A contract liability for deferred revenue is recorded when consideration is received or is unconditionally due from a customer prior to transferring control of goods or services to the customer under the terms of a contract. Deferred revenue balances typically result from advance payments received from customers from billings in excess of revenue recognized on services arrangements.
Unbilled receivables represent amounts earned for which the Company has an unconditional right to payment but has not yet invoiced the customer. When the Company’s right to consideration is conditional on future performance or other factors beyond the passage of time, these amounts are classified as contract assets and presented separately from trade accounts receivable in other receivables in the consolidated balance sheet and are converted to accounts receivable once the Company's right to the consideration becomes unconditional, which varies by contract but is generally based on achieving certain acceptance milestones.
Shipping and Handling Costs
The Company includes shipping and handling costs billed to customers in net sales and includes the costs incurred to transport product to customers as well as certain internal handling costs, which relate to activities to prepare goods for shipment, as cost of sales. Shipping and handling costs incurred after control is transferred to the customer are accounted for as fulfillment costs and are not accounted for as separate revenue obligations.
68
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
Tax Collected from Customers
Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, which are collected by the Company from customers, are excluded from net sales.
Advertising Costs
Advertising costs are expensed in the period in which they are incurred and are reflected in selling, general and administrative expense on the Consolidated Statements of Operations. Advertising expense was $ 13.7 million, $ 11.0 million and $ 10.4 mi llion for the years ended December 31, 2025, 2024 and 2023 , respectively.
Research and Development
Research and development (R&D) costs are expensed in the period in which they are incurred. R&D costs include materials and equipment that have no alternative future use, depreciation on equipment and facilities currently used for R&D purposes, personnel costs, contract services and reasonable allocations of indirect costs, if clearly related to an R&D activity. Expenditures related to ongoing production are recorded in cost of sales.
Restructuring
The Company records restructuring charges associated with management-approved restructuring plans, which could include the elimination of job functions, closure or relocation of facilities, reorganization of operations, changes in management structure, workforce reductions or other actions. Restructuring charges may include ongoing and enhanced termination benefits related to employee separations, contract termination costs, impairment of certain assets and other related costs associated with exit or disposal activities. Severance benefits are provided to employees primarily under the Company’s ongoing benefit arrangements. These severance costs are accrued once management commits to a plan of termination and it becomes probable that employees will be separated and entitled to benefits at amounts that can be reasonably estimated. In some instances, the Company enhances its ongoing termination benefits with one-time termination benefits, which are recognized when employees are notified of their enhanced termination benefits.
Foreign Currency Translation
For the years ended December 31, 2025, 2024 and 2023 , approximately 28.5 %, 33.3 % and 31.0 %, respectively, of the Company’s net sales were to customers located outside the U.S. A portion of these sales was denominated in currencies other than the U.S. dollar, particularly sales from the Company’s foreign subsidiaries. The financial position and results of operations of certain of the Company’s foreign subsidiaries are measured using the local currency as the functional currency. Revenues and expenses of these subsidiaries have been translated into U.S. dollars at average exchange rates prevailing during the period. Assets and liabilities of these subsidiaries have been translated at the exchange rates as of the balance sheet date. Translation gains and losses are recorded in accumulated other comprehensive loss. Upon sale or liquidation of an investment in a foreign subsidiary, the amount of net translation gains or losses that have been accumulated in other comprehensive loss attributable to that investment are reported as a gain or loss in earnings in the period in which the sale or liquidation occurs.
Aggregate foreign currency gains and losses, such as those resulting from the settlement of receivables or payables, foreign currency contracts and short-term intercompany advances in a currency other than the subsidiary’s functional currency, are recorded currently in earnings (included in other income (expense), net) and resulted in gains ( losses) of $( 8.0 ) million, $ 6.2 million and $ 1.6 mill ion during the years ended December 31, 2025, 2024 and 2023 , respectively. Foreign currency remeasurement gains and losses related to certain long-term intercompany loans that are not expected to be settled in the foreseeable future are recorded in accumulated other comprehensive loss.
Equity-Based Compensation
The principal awards issued under the Company's equity-based compensation plans, which are described in Note 15 included in these consolidated financial statements, include restricted stock units (“RSUs”), stock options, and performance‑based awards, issued to employees and non‑employee directors under its equity incentive plans. The Company measures stock‑based compensation cost at the grant date fair value of the award.
69
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
Compensation expense for awards with service‑based vesting conditions is recognized on a straight‑line basis over the requisite service period. For performance‑based awards with non‑market performance conditions, compensation expense is recognized based on the Company’s assessment of the probability of achieving the specified performance conditions and is adjusted as necessary to reflect changes in that assessment. For performance‑based awards that include market performance conditions, compensation expense is recognized regardless of whether the market condition is satisfied, provided the requisite service is rendered. Stock‑based compensation expense is recorded on the Consolidated Statements of Operations based on the functional classification of the related employees.
The Company records deferred tax assets related to compensation expense for awards that are expected to result in future tax deductions for the Company, based on the amount of compensation cost recognized and the Company’s statutory tax rate in the jurisdiction in which it expects to receive a deduction. Differences between the deferred tax assets recognized for financial reporting purposes and actual tax deductions reported on the Company’s income tax return are recorded on the Consolidated Statements of Operations within income tax expense benefit.
Income Taxes
Deferred income taxes reflect the future tax consequences of differences between the financial reporting and tax basis of assets and liabilities. The Company records a valuation allowance, when appropriate, to reduce deferred tax assets to an amount that is more likely than not to be realized.
Tax benefits that result from uncertain tax positions may be recognized only if they are considered more likely than not to be sustainable, based on their technical merits. The amount of benefit to be recognized is the largest amount of tax benefit that is at least 50 % likely to be realized.
In addition, the Company does not provide for U.S. taxes related to the foreign currency remeasurement gains and losses on its long-term intercompany loans with foreign subsidiaries. These loans are not expected to be repaid in the foreseeable future, and the foreign currency gains and losses are therefore recorded to accumulated other comprehensive loss.
The Company records the income tax effects related to the activity of its defined benefit plans and hedging instruments in accumulated other comprehensive loss at the currently enacted tax rate and reclassifies it to net income (loss) in the same period that the related pre-tax accumulated comprehensive income (loss) reclassifications are recognized.
Earnings (Loss) Per Share
Basic earnings (loss) per share (EPS) from continuing operations is computed by dividing income (loss) from continuing operations, less any dividends and deemed dividends related to the Convertible Preferred Stock, by the weighted average number of common shares outstanding during the period. The numerator in diluted EPS from continuing operations is based on the basic EPS from continuing operations numerator, adjusted to add back any dividends and deemed dividends related to the Convertible Preferred Stock, subject to antidilution requirements. The denominator used in diluted EPS from continuing operations is based on the basic EPS computation plus the effect of potentially dilutive common shares related to the Convertible Preferred Stock and equity-based compensation plans, subject to antidilution requirements.
For the years ended December 31, 2025, 2024 and 2023 , 6.5 million, 18.3 million and 17.9 million shares, respectively, of outstanding equity-based compensation awards were not included in the computation of diluted EPS, because the effect was antidilutive or the performance conditions were not met. Of those amounts, for the years ended December 31, 2024 and 2023, 5.3 million and 1.5 million shares, respectively, would have been considered dilutive if the Company had not been in a net loss from continuing operations position.
For the years ended December 31, 2025, 2024 and 2023 , 45.6 million, 43.1 million and 40.8 million, respectively, of as-if converted shares related to the Convertible Preferred Stock were excluded from the diluted share count because they were anti-dilutive; however, for the years ended December 31, 2024 and 2023, they may have been considered dilutive if the Company had not been in a loss from continuing operations position.
70
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
The following table presents the basis for the EPS computations (in millions, except per share data):
Year ended December 31,
2025
2024
2023
Numerator:
Income (loss) from continuing operations
$
324.3
$
( 206.0
)
$
( 652.8
)
Income (loss) from discontinued operations, net of tax
1,959.4
( 109.5
)
( 854.0
)
Net income (loss)
$
2,283.7
$
( 315.5
)
$
( 1,506.8
)
Dividends on Series A convertible preferred stock
( 68.9
)
( 65.2
)
( 61.8
)
Net income (loss) attributable to common stockholders
$
2,214.8
$
( 380.7
)
$
( 1,568.6
)
Denominator:
Weighted average common shares outstanding – basic
219.5
214.4
210.9
Dilutive effect of equity-based awards
10.5
—
—
Dilutive effect of as-if converted Series A convertible preferred stock
—
—
—
Weighted average common shares outstanding – diluted
230.0
214.4
210.9
Basic:
Earnings (loss) from continuing operations per share
$
1.16
$
( 1.27
)
$
( 3.39
)
Earnings (loss) from discontinued operations per share
8.93
( 0.51
)
( 4.05
)
Earnings (loss) per share
$
10.09
$
( 1.78
)
$
( 7.44
)
Diluted:
Earnings (loss) from continuing operations per share
$
1.11
$
( 1.27
)
$
( 3.39
)
Earnings (loss) from discontinued operations per share
8.52
( 0.51
)
( 4.05
)
Earnings (loss) per share
$
9.63
$
( 1.78
)
$
( 7.44
)
Concentrations of Risk
Non-derivative financial instruments used by the Company in the normal course of business include letters of credit and commitments to extend credit, primarily accounts receivable. The Company generally does not require collateral on its accounts receivable. These financial instruments involve risk, including the credit risk of nonperformance by the counterparties to those instruments, and the actual loss may exceed the reserves provided in the Company’s Consolidated Balance Sheets. For further discussion of customer-related concentrations of risk, see Note 17 included in these consolidated financial statements.
The Company manages its exposures to credit risk associated with accounts receivable using tools such as credit approvals, credit limits and monitoring procedures. The Company estimates the allowance for doubtful accounts based on the actual payment history and individual circumstances of significant customers as well as the age of receivables. In management’s opinion, as of December 31, 2025, the Company did not have significant unreserved risk of credit loss due to the non-performance of customers or other counterparties related to amounts receivable. However, an adverse change in financial condition of a significant customer or group of customers or in the telecommunications industry could materially affect the Company’s estimates related to doubtful accounts.
The principal raw materials and components purchased by the Company (aluminum, copper, steel, optical fiber, capacitors, memory devices and silicon chips) are subject to changes in market price as these materials are linked to various commodity markets. The Company attempts to mitigate these risks through effective requirements planning and by working closely with its key suppliers to obtain the best possible pricing and delivery terms.
The Company relies on sole suppliers or a limited group of suppliers for certain key components (memory devices, capacitors and silicon chips), subassemblies and modules and a limited group of contract manufacturers to manufacture a significant portion of its products. Any disruption or termination of these arrangements could have a material adverse impact on the Company’s results of operations.
71
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
Recent Accounting Pronouncements
Adopted in 2025
On January 1, 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . The new guidance improves income tax disclosures by requiring additional information related to the rate reconciliation and income taxes paid, including 1) consistent categories and greater disaggregation of information in the rate reconciliation and 2) disaggregation of income taxes paid by jurisdiction. The guidance is effective for the Company on a prospective or retroactive basis, beginning January 1, 2025 for the annual period. As a result, the Company has enhanced its income tax disclosures to align with the new guidance on a prospective basis. As the adoption of this ASU relates to disclosures only, there was no impact to the Company’s results of operations and financial condition.
Issued but Not Adopted
In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements. The new guidance addresses various technical corrections, clarifications, and minor improvements to the ASC. The ASU addresses 33 issues, primarily clarifying existing guidance, correcting errors, or making minor improvements to enhance the understandability and application of the ASC. The amendments are varied in nature and may impact the application of guidance in areas where the original guidance was unclear. The guidance is effective for the Company beginning January 1, 2027 for the interim and annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on the consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements . The new guidance aims to enhance the clarity and navigability of guidance related to interim disclosures. This guidance clarifies when the guidance in ASC Topic 270 is applicable and specifies the disclosures required during interim reporting periods. The amendments clarify that ASC Topic 270 applies to all entities that provide interim financial statements and notes in accordance with generally accepted accounting principles (GAAP). The ASU provides a comprehensive list of interim disclosures required by GAAP, which is intended to improve efficiency in using the ASC. This list clarifies existing requirements and does not aim to expand or reduce current interim disclosure obligations. The guidance is effective for the Company beginning January 1, 2028 for the interim and annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on the consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The new guidance establishes authoritative guidance for business entities on the recognition, measurement, and presentation of government grants defined as a transfer of a monetary asset or tangible non-monetary asset, other than an exchange transaction, from a government to a business entity. The guidance is effective for the Company beginning January 1, 2029 for the interim and annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on the consolidated financial statements.
In November 2025, the FASB issued ASU No. 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. The new guidance clarify certain aspects of hedge accounting guidance and address incremental hedge accounting issues arising from the global reference rate reform initiative. The ASU aims to align hedge accounting more closely with the economics of an entity’s risk management activities, enabling entities to achieve and maintain hedge accounting for highly effective economic hedges of forecasted transactions. The guidance is effective for the Company beginning January 1, 2027 for the interim and annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on the consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. The new guidance refines the scope of Topic 815 by providing clarification regarding the contracts subject to derivative accounting. The guidance also provides clarification under Topic 606 for share-based payments from a customer in a revenue contract. The guidance is effective for the Company on a prospective or modified retrospective basis, beginning January 1, 2027 for the interim and annual periods. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on the consolidated financial statements.
72
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The new guidance modernizes the accounting for software costs and provides the following criteria for capitalization of software costs: (1) management has authorized and committed to funding the software project; and (2) it is probable that the project will be completed and the software will be used to perform the function intended. The guidance is effective for the Company on a prospective, modified prospective or retrospective basis, beginning January 1, 2028 for the interim and annual periods. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on the consolidated financial statements.
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The new guidance is expected to provide decision-useful information to investors and other financial statement users while reducing the time and effort necessary to analyze and estimate credit losses for current accounts receivable and current contract assets. The amendments in this update introduce a practical expedient when applying the guidance related to the estimation of expected credit losses for current accounts receivable and current contract assets resulting from transactions arising from contracts with customers . The guidance is effective for the Company on a prospective basis, beginning January 1, 2026 for the interim and annual periods. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on the consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. The new guidance improves disclosures for expenses of public entities and addresses requests from investors for more detailed information about the types of expenses in commonly presented expense captions. Coupled with recent standards that enhanced the disaggregation of revenue and income tax information, the disaggregated expense information required by these amendments will enable investors to better understand the major components of an entity’s income statement. The guidance is effective for the Company on a prospective or retrospective basis, as of January 1, 2027 for the annual period. Early adoption is permitted. As this ASU relates to disclosures only, there will be no impact to the Company’s results of operations and financial condition.
3. ACQUISITIONS
On June 7, 2024, the Company acquired certain assets of Casa Systems, Inc. and its subsidiaries (Casa) which were integrated into the Company’s Aurora (formerly ANS) segment. Casa provides telecommunication infrastructure equipment and software-centric infrastructure solutions that allow cable service providers to deliver voice, video and data services over a single platform. The Company funded the purchase price of $ 45.1 million and settled certain assumed liabilities, with cash on hand.
In the first quarter of 2025, the Company completed its acquisition method of accounting in accordance with ASC Topic 805, Business Combinations , and made an adjustment to decrease the fair value of accounts receivable, net by $ 1.7 million with a corresponding increase of $ 1.7 million to goodwill.
73
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
The following table represents the final determination of the fair value of identifiable assets acquired and liabilities assumed in the transaction as of the acquisition date:
Fair Value
Purchase price
Total cash consideration paid
$
45.1
Assets
Accounts receivable, net (1)
$
3.5
Inventories, net
9.4
Property, plant and equipment
6.1
Goodwill
6.9
Identifiable intangible assets
21.1
Other noncurrent assets
1.1
Less: Liabilities assumed
Accounts payable and accrued and
other liabilities
2.3
Other noncurrent liabilities
0.7
Fair value allocated to net assets acquired
$
45.1
(1) The fair value of accounts receivable, net was determined to be $ 3.5 million with a gross contractual amount of $ 12.2 million and an uncollectible amount of $ 8.7 million.
The impact of measurement period adjustments to the Consolidated Statements of Operations was immaterial for the years ended December 31, 2025 and 2024.
The goodwill arising from the transaction is believed to result from the company’s reputation in the marketplace and assembled workforce and is expected to be fully deductible for income tax purposes.
4. DIVESTITURES
CCS Segment:
On August 3, 2025, the Company entered into a Purchase Agreement with Amphenol Corporation, a Delaware corporation (Amphenol) , pursuant to which Amphenol agreed to acquire the Company’s CCS segment in exchange for $ 10.5 billion in cash, subject to certain adjustments. The CCS segment provides wired infrastructure for data centers, enterprises and service providers on a global scale. Following shareholder approval, which was obtained on October 16, 2025, the divestiture of the CCS segment met the “held for sale” criteria per ASC 360-10. The Company determined, qualitatively and quantitatively, that this transaction represented a strategic shift that would have a major effect on its operations and financial results. As such, the results of operations directly attributable to the CCS segment have been reclassified to discontinued operations per ASC 205-20 on the Consolidated Statements of Operations, retrospectively for all periods presented beginning in the fourth quarter of 2025. In addition, all assets and liabilities have been classified as assets and liabilities held for sale on the Consolidated Balance Sheets for all periods presented. The sale was completed subsequent to the fiscal year end on January 9, 2026. In connection with the transaction and as required by the Purchase Agreement, the Company repaid and issued notices of full redemption of its existing indebtedness, as well as redeemed its Convertible Preferred Stock, subsequent to fiscal year end on the closing date. For further discussion of the sale of the CCS segment, see Note 19 in these consolidated financial statements.
OWN Segment and DAS business unit:
On January 31, 2025, the Company completed the previously announced sale of the OWN segment and the DAS business unit of the NICS segment to Amphenol, pursuant to the Purchase Agreement dated July 18, 2024, in exchange for net cash consideration of $ 2.0 billion. The proceeds are net of $ 9.1 million of transaction expenses and $ 83.2 million of cash included in the assets sold.
74
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
The OWN segment and DAS business unit met the “held for sale” criteria per ASC 360-10 in the third quarter of 2024, and the Company determined, qualitatively and quantitatively, that this transaction represented a strategic shift that would have a major effect on the Company’s operations and financial results. As such, the results of operations directly attributable to the OWN segment and DAS business unit have been reclassified to discontinued operations per ASC 205-20 on the Consolidated Statements of Operations, retrospectively for all periods presented beginning in the third quarter of 2024. In addition, all assets and liabilities of the OWN segment and DAS business unit were classified as assets and liabilities held for sale on the Consolidated Balance Sheets as of December 31, 2024. Upon the closing of the transaction on January 31, 2025, the Company recognized a gain of $ 498.2 million on the disposal of the OWN segment and DAS business unit, which is included in income (loss) from discontinued operations, net of income taxes, on the Consolidated Statements of Operations for the year ended December 31, 2025.
In connection with the transaction, the Company entered into several contractual arrangements with Amphenol, including a Transition Service Agreement (Amphenol TSA) (as described below under “Transition Service Agreements”), Manufacturing Supply Agreement (Amphenol MSA), Sales and Supply Agreement and a Master Professional Services Agreement.
Under the Amphenol MSA, the Company continues to manufacture and supply certain products to the divested business. Under the terms of the Amphenol MSA, the Company was obligated to provide manufacturing services for a period of up to twelve months following the closing date of the transaction, unless earlier terminated by the parties. The agreement was entered into to facilitate the operational transition and ensure continuity of supply for Amphenol’s customers. Pursuant to the Amphenol MSA, the Company acquired components directly from Amphenol and was also responsible for procuring certain components from suppliers for the manufacturing of finished goods at the direction of Amphenol. As the Company does not obtain control of these components before they were transferred to Amphenol, the Company accounts for revenue associated with such components on a net basis. For the year ended December 31, 2025 , the Company recognized net revenues of $ 5.4 million under the Amphenol MSA presented within income (loss) from discontinued operations, net of income taxes, on the Consolidated Statements of Operations.
The Sales and Supply Agreement and Master Professional Services Agreement, enable the companies to act as both a buyer and seller of each other’s products and services in instances where those offerings might be integral to the Company’s remaining operations. The Sales and Supply Agreement is effective for a term of thirty-six months and the Master Professional Services Agreement term is indefinite, unless either of the agreements are terminated early. The Company has evaluated these arrangements and concluded that while they represent ongoing business activity, they do not constitute a continuation of the disposed business. Accordingly, revenues and expenses generated from these agreements are presented within income (loss) from continuing operations on the Consolidated Statements of Operations.
Home Networks business:
In January 2024, the Company completed the sale of the Home business to Vantiva SA (Vantiva) pursuant to the Call Option Agreement entered into on October 2, 2023 and the Purchase Agreement dated as of December 7, 2023, in exchange for (i) 134,704,669 shares of Vantiva common stock representing a 24.73 % equity stake in Vantiva (determined on a fully diluted basis), (ii) $ 250,465 in cash (in addition to cash paid in exchange for the cash on the Home business companies’ balance sheets) and (iii) an earn-out of up to $ 100 million in the aggregate. The earn-out payments are contingent upon Vantiva achieving adjusted EBITDA equal to or greater than € 400 million for one or more of Vantiva’s first five fiscal years following the closing of the transaction. The earn-out payment with respect to any fiscal year will be subject to an additional annual cap, the amount of which will depend on certain elections made by the Company following Vantiva reaching the € 400 million adjusted EBITDA threshold for the first time, and on Vantiva’s maintenance of certain liquidity levels (after giving effect to such payment).
The Home business qualified as “held for sale” per ASC 360-10 in the fourth quarter of 2023 and was classified as a discontinued operation per ASC 205-20, as the Company determined, qualitatively and quantitatively, that this transaction represented a strategic shift that would have a major effect on the Company’s operations and financial results. As such, activity directly attributable to the Home business has been removed from continuing operations and presented in income (loss) from discontinued operations, net of income taxes, on the Consolidated Statements of Operations for all periods presented. In addition, all assets and liabilities of the Home business were classified as assets and liabilities held for sale on the Consolidated Balance Sheets as of December 31, 2023. In connection with the “held for sale” classification, the Company recognized a loss on classification as held for sale of $ 203.4 million, based on Level 3 valuation inputs, in the fourth quarter of 2023. Upon the closing of the transaction on January 9, 2024, the Company recognized an additional loss of $ 56.4 million on the disposal of the Home business for the year ended December 31, 2024.
75
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
Following the closing of the transaction, the Company entered into a Transition Service Agreement (Vantiva TSA), whereby the Company provided and received certain post-closing support on a transitional basis (as described below under “Transition Service Agreements”), and a Supply Agreement with Vantiva (Vantiva Supply Agreement), whereby the Company sold certain retained inventory at cost, or market price if below cost, for a period of two years.
The Company’s investment in Vantiva is accounted for using the equity method of accounting, and the carrying value of the investment is included in other noncurrent assets on the Consolidated Balance Sheets. The Company recognized a loss on its investment of $ 17.0 million during the year ended December 31, 2024, as a result of recording its proportionate share of loss on its equity investment, which is recorded on a one-quarter lag basis in income (loss) from discontinued operations, net of income taxes, on the Consolidated Statements of Operations beginning in the second quarter of 2024.
The following table presents the summarized components of income (loss) from discontinued operations, net of income taxes, for the years ended December 31, 2025, 2024 and 2023, for each discontinued operation:
CCS
OWN
DAS
Home
2025
2024
2023
2025
2024
2023
2025
2024
2023
2025
2024
2023
Net sales
$
3,754.5
$
2,823.2
$
2,701.3
$
90.8
$
969.7
$
880.0
$
11.7
$
296.1
$
344.0
$
14.5
$
55.5
$
1,210.2
Cost of sales (1)
2,365.6
1,851.4
1,937.6
50.0
556.1
550.6
9.8
160.2
191.7
14.5
70.5
1,060.2
Gross profit (loss)
1,388.9
971.8
763.7
40.8
413.6
329.4
1.9
135.9
152.3
—
( 15.0
)
150.0
Operating expenses:
Selling, general and
administrative
390.1
283.5
270.7
24.5
73.2
48.3
3.4
35.8
41.8
( 1.7
)
18.2
96.9
Research and development
74.9
68.7
64.3
3.1
50.9
46.4
3.1
30.2
30.2
—
0.1
98.3
Amortization of purchased
intangible assets
56.0
71.4
74.0
—
8.5
20.0
—
3.1
6.1
—
6.4
83.4
Restructuring costs
(credits), net
0.2
—
( 4.3
)
0.3
( 0.1
)
( 0.1
)
—
0.1
4.7
—
—
6.0
Asset impairments (2)
—
—
99.1
—
—
—
—
—
—
—
19.2
672.6
Total operating expenses
521.2
423.6
503.8
27.9
132.5
114.6
6.5
69.2
82.8
( 1.7
)
43.9
957.2
Operating income (loss)
867.7
548.2
259.9
12.9
281.1
214.8
( 4.6
)
66.7
69.5
1.7
( 58.9
)
( 807.2
)
Interest expense (3)
( 637.5
)
( 686.9
)
( 675.8
)
—
—
—
—
—
—
—
—
—
Other income (expense),
net (4)
( 14.4
)
2.3
( 9.6
)
( 0.8
)
( 2.4
)
( 6.2
)
—
( 0.1
)
—
0.3
( 18.0
)
1.0
Income (loss) from
operations of discontinued
businesses before income
taxes
215.8
( 136.4
)
( 425.5
)
12.1
278.7
208.6
( 4.6
)
66.6
69.5
2.0
( 76.9
)
( 806.2
)
Gain (loss) on disposal of
discontinued operations
before income taxes
—
—
—
869.0
—
—
—
—
—
—
( 27.9
)
—
Income tax (expense) benefit
1,238.8
( 118.6
)
( 17.5
)
( 375.5
)
( 66.7
)
( 49.5
)
2.0
( 16.0
)
( 16.5
)
( 0.2
)
( 12.3
)
183.1
Income (loss) from
discontinued operations,
net of income taxes
$
1,454.6
$
( 255.0
)
$
( 443.0
)
$
505.6
$
212.0
$
159.1
$
( 2.6
)
$
50.6
$
53.0
$
1.8
$
( 117.1
)
$
( 623.1
)
(1) Cost of sales includes a charge of $ 19.5 million for excess and obsolete inventory related to the Home business during the year ended December 31, 2024 .
(2) Asset impairments reflect a partial goodwill impairment charge of $ 99.1 million recorded in the year ended December 31, 2023 for the Building Data Center Connectivity ( BDCC) reporting unit of the CCS segment. In addition, asset impairments include a loss on impairment of $ 19.2 million related to Home business patents for the year ended December 31, 2024. For the year ended December 31, 2023, a sset impairments reflect the loss of $ 203.4 million on classification as held for sale related to the Home business and a partial impairment of $ 469.2 million related to the Home segment’s intangible assets. The fair value measurements were determined using Level 1 and/or Level 3 valuation inputs.
(3) In connection with the sale of the CCS segment that was completed subsequent to the fiscal year end on January 9, 2026, the terms of the Purchase Agreement with Amphenol required that the CCS segment be transferred on a debt‑free basis, and therefore, the Company repaid its third‑party borrowings at closing using a portion of the proceeds from the sale of the CCS segment. Accordingly, all third-party debt obligations remained classified as long-term debt on the Consolidated Balance Sheets as of December 31, 2025 and 2024. However, in accordance with accounting guidance, interest expense on debt that is required to be repaid as a direct result of a disposal transaction that qualifies as a discontinued operation is reported within discontinued operations. Because the closing of the divestiture required repayment of all outstanding third‑party debt due to the contractual requirement to deliver the business debt‑free, all interest expense has been presented within discontinued operations for all years presented.
76
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
(4) Other income (expense), net includes a loss on equity investment of $ 17.0 million related to the Home business for the year ended December 31, 2024 .
The following table presents the summarized components of income (loss) from discontinued operations, net of income taxes, for the years ended December 31, 2025, 2024 and 2023, for the combined discontinued operations:
2025
2024
2023
Net sales
$
3,871.5
$
4,144.5
$
5,135.5
Cost of sales (1)
2,439.9
2,638.2
3,740.1
Gross profit
1,431.6
1,506.3
1,395.4
Operating expenses:
Selling, general and administrative
416.3
410.7
457.7
Research and development
81.1
149.9
239.2
Amortization of purchased intangible assets
56.0
89.4
183.5
Restructuring costs, net
0.5
—
6.3
Asset impairments (2)
—
19.2
771.7
Total operating expenses
553.9
669.2
1,658.4
Operating income (loss)
877.7
837.1
( 263.0
)
Interest expense
( 637.5
)
( 686.9
)
( 675.8
)
Other expense, net (3)
( 14.9
)
( 18.2
)
( 14.8
)
Income (loss) from operations of discontinued businesses before income taxes
225.3
132.0
( 953.6
)
Gain (loss) on disposal of discontinued operations before income taxes
869.0
( 27.9
)
—
Income tax (expense) benefit
865.1
( 213.6
)
99.6
Income (loss) from discontinued operations, net of income taxes
$
1,959.4
$
( 109.5
)
$
( 854.0
)
(1) Cost of sales includes a charge of $ 19.5 million for excess and obsolete inventory related to the Home business during the year ended December 31, 2024 .
(2) Asset impairments include a loss on impairment of $ 19.2 million related to Home business patents for the year ended December 31, 2024. For the year ended December 31, 2023, asset impairments reflect a partial goodwill impairment charge of $ 99.1 million recorded for the BDCC reporting unit of the CCS segment, a loss of $ 203.4 million on classification as held for sale related to the Home business and a partial impairment of $ 469.2 million related to the Home segment’s intangible assets. The fair value measurements were determined using Level 1 and/or Level 3 valuation inputs.
(3) Other expense, net includes a loss on equity investment of $ 17.0 million related to the Home business for the year ended December 31, 2024 .
77
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
The following table presents balance sheet information for assets and liabilities held for sale related to the discontinued operations:
December 31, 2025
December 31, 2024
Cash and cash equivalents
$
168.4
$
259.2
Accounts receivable, net
626.5
687.2
Inventories, net
512.4
522.2
Prepaid expenses and other current assets
76.5
62.6
Property, plant, and equipment, net
293.4
56.9
Goodwill
2,160.6
617.8
Other intangible assets, net
186.0
111.6
Deferred income taxes
107.0
2.2
Other assets
193.7
7.8
Total current assets held for sale
$
4,324.5
$
2,327.5
Property, plant, and equipment, net
—
260.0
Goodwill
—
2,107.7
Other intangible assets, net
—
237.0
Deferred income taxes
—
106.2
Other noncurrent assets
—
149.4
Total noncurrent assets
—
2,860.3
Total assets held for sale
$
4,324.5
$
5,187.8
Accounts payable
$
422.2
$
399.1
Accrued and other liabilities
339.6
243.3
Deferred income taxes
22.2
6.9
Total current liabilities held for sale
$
784.0
$
649.3
Deferred income taxes
—
8.5
Other noncurrent liabilities
—
87.7
Total noncurrent liabilities
—
96.2
Total liabilities held for sale
$
784.0
$
745.5
The following table presents the details of the gain (loss) on disposal of the OWN segment and DAS business unit, collectively, and the Home business:
OWN/DAS
Home
January 31, 2025
January 9, 2024
Cash consideration received (net of cash acquired)
$
2,034.5
$
—
Transaction expense
( 9.1
)
—
Fair value of shares issued to seller
—
17.0
Total disposal consideration
2,025.4
17.0
Carrying value of net assets sold
( 1,058.5
)
( 17.5
)
Gain (loss) on disposal before income taxes and reclassification of
foreign currency translation
966.9
( 0.5
)
Reclassification of foreign currency translation
( 97.9
)
( 27.4
)
Gain (loss) on disposal before income taxes
869.0
( 27.9
)
Income tax expense
( 370.8
)
( 28.5
)
Gain (loss) on disposal, net of income taxes
$
498.2
$
( 56.4
)
78
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
The cash flows related to discontinued operations have not been segregated on the Consolidated Statements of Cash Flows, and accordingly, they include the results from continuing and discontinued operations. The following table summarizes the Company’s cash inflows related to the ongoing activities of the discontinued operations, including the Vantiva and Amphenol TSAs, as described below, and inventory sales resulting from the Vantiva Supply Agreement and Amphenol MSA, as described above:
Year Ended December 31,
2025
2024
Vantiva TSA fees
$
4.0
$
22.6
Vantiva Supply Agreement and other inventory sales
16.2
46.3
Amphenol TSA fees
33.1
—
Amphenol MSA inventory sales
27.6
—
The following table summarizes significant non-cash operating items and certain other items of the discontinued operations included on the Consolidated Statements of Cash Flows:
Year Ended December 31,
2025
2024
2023
(Gain) loss on disposal of discontinued operations
$
( 869.0
)
$
27.9
$
—
Loss on equity investment
—
17.0
—
Asset impairments (1)
—
19.2
771.7
Equity-based compensation
12.2
9.6
16.0
Depreciation and amortization
94.8
147.0
259.8
Additions to property, plant and equipment
47.3
13.5
28.3
(1) For the year ended December 31, 2023, asset impairments include a loss of $ 203.4 million on classification as held for sale related to the Home business , $ 469.2 million of partial impairment charge related to the Home segment’s intangible assets and $ 99.1 million of partial goodwill impairment charge related to the BDCC reporting unit of the CCS segment.
Other Business Dispositions
OneCell:
On May 1 2025, the Company completed the sale of its OneCell business to Amphenol, pursuant to a Purchase Agreement dated April 30, 2025. OneCell is an advanced in-building small cell solution designed to deliver seamless LTE and 5G connectivity across enterprise environments. The transaction involved the sale of certain assets and transfer of certain operations that were previously included within the RUCKUS segment. The disposal did not meet the criteria for classification as a discontinued operation under ASC 205-20 as it does not represent a strategic shift that has or will have a major effect on the Company’s operations and financial results.
The Company received cash consideration of $ 7.4 million, net of $ 1.2 million of cash included in the assets sold.
The carrying amount of the net assets disposed was $ 10.0 million. A pretax loss on sale of $ 4.8 million was recognized and included in other on the Consolidated Statements of Operations for the year ended December 31, 2025.
Transition Service Agreements
In conjunction with the closing of the sales of the OWN segment and DAS business unit and the OneCell business, the Company entered into the Amphenol TSA. The terms of the Amphenol TSA vary based on the services provided thereunder, with the longest such term having a duration of twelve months, excluding certain services related to manufacturing facilities. The Amphenol TSA provides options to extend services for up to two renewal terms of three months each. For the year ended December 31, 2025 , the Company recognized income of $ 33.4 million under the Amphenol TSA, which is included in transition service agreement income within income (loss) from continuing operations on the Consolidated Statements of Operations.
79
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
In conjunction with the closing of the Home business transaction, the Company entered into the Vantiva TSA. The terms of the Vantiva TSA varied based on the services provided thereunder, with the longest such term having a duration of thirty-six months. The Vantiva TSA provided options to extend services for up to two renewal terms of six months each. Under the Vantiva TSA, the Company recognized income of $ 2.1 million and $ 24.5 million for the years ended December 31, 2025 and 2024, respectively, which is included in transition service agreement income within income (loss) from continuing operations on the Consolidated Statements of Operations. As of the year ended December 31, 2024, the majority of the Vantiva TSA services had ceased.
5. GOODWILL AND OTHER INTANGIBLE ASSETS
The following table presents details of the Company’s intangible assets other than goodwill:
December 31, 2025
December 31, 2024
Gross Carrying
Amount
Accumulated Amortization
Net Carrying Amount
Gross Carrying
Amount
Accumulated Amortization
Net Carrying Amount
Customer base
$
1,060.6
$
408.0
$
652.6
$
1,076.1
$
362.7
$
713.4
Trade names and trademarks
330.0
171.3
158.7
331.7
148.6
183.1
Patents and technologies
1,102.5
1,074.7
27.8
1,123.3
1,040.5
82.8
Other (1)
—
—
—
32.0
32.0
—
Total intangible assets
$
2,493.1
$
1,654.0
$
839.1
$
2,563.1
$
1,583.8
$
979.3
(1) During the year ended December 31, 2025, the Company wrote off approximately $ 32.0 million of gross cost and accumulated amortization related to fully amortized other intangibles. The adjustment did not have an impact on the net balances previously reported during any of the interim periods during 2025, nor any prior fiscal periods.
There were no impairments of finite-lived intangible assets identified during the years ended December 31, 2025, 2024 or 2023.
Amortization expense for intangible assets was $ 138.4 million, $ 165.1 million and $ 227.0 million for the years ended December 31, 2025, 2024 and 2023 , respectively. Future amortization expense as of December 31, 2025 is as follows:
Estimated
Amortization
Expense
2026
$
102.0
2027
90.0
2028
88.5
2029
88.5
2030
88.5
Thereafter
381.3
The following table presents the activity in goodwill by reportable segment.
December 31, 2024
Activity
December 31, 2025
Goodwill
Accumulated Impairment Losses
Total
Foreign Exchange and Other
Goodwill
Accumulated Impairment Losses
Total
RUCKUS
$
534.7
$
( 41.2
)
$
493.5
2.4
$
537.1
$
( 41.2
)
$
495.9
Aurora
2,000.1
( 1,734.0
)
266.1
2.6
2,002.7
( 1,734.0
)
268.7
Total
$
2,534.8
$
( 1,775.2
)
$
759.6
$
5.0
$
2,539.8
$
( 1,775.2
)
$
764.6
December, 31, 2023
Activity
December 31, 2024
Goodwill
Accumulated Impairment Losses
Total
Foreign Exchange and Other
Goodwill
Accumulated Impairment Losses
Total
RUCKUS
$
537.1
$
( 41.2
)
$
495.9
$
( 2.4
)
$
534.7
$
( 41.2
)
$
493.5
Aurora
1,995.4
( 1,734.0
)
261.4
4.7
2,000.1
( 1,734.0
)
266.1
Total
$
2,532.5
$
( 1,775.2
)
$
757.3
$
2.3
$
2,534.8
$
( 1,775.2
)
$
759.6
80
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
During the years ended December 31, 2025 and 2024, the Company recorded an additional $ 1.7 million and $ 5.2 million, respectively, of goodwill in the Aurora (formerly ANS) segment related to the Casa acquisition.
Interim and Annual Goodwill Impairment Testing
Estimating the fair value of a reporting unit involves uncertainties because it requires management to develop numerous assumptions, including assumptions about the future growth and potential volatility in revenues and costs, capital expenditures, industry economic factors and future business strategy. Changes in projected revenue growth rates, projected EBITDA margin percentages or estimated discount rates due to uncertain market conditions, terminal growth rates, lower market multiples, loss of one or more key customers, changes in the Company’s strategy, changes in technology or other factors could negatively affect the fair value in one or more of the Company’s reporting units and result in a material impairment charge in the future.
Year 2025:
During the annual impairment test performed in the fourth quarter of 2025, no goodwill impairments were identified.
Year 2024:
During the third quarter of 2024, the Company completed an impairment analysis for goodwill recorded within the RUCKUS (formerly NICS) reporting unit, which was impacted by the divestiture of the DAS business unit. The quantitative assessment was used, and the Company determined that the fair value of the impacted reporting unit exceeded the carrying value and that no impairment existed immediately prior to or subsequent to allocating goodwill to the disposal group that included the DAS business unit. The Company allocated $ 113.5 million of goodwill to the disposal group based on the relative fair value of the DAS business unit as compared to the RUCKUS reporting unit, along with $ 504.3 million of goodwill that was entirely attributable to its OWN reporting unit. Total goodwill for the disposal group of $ 617.8 million was classified as held for sale as of December 31, 2024. The fair values of the DAS business unit and the RUCKUS reporting unit were determined using Level 3 valuation inputs.
During the annual impairment test performed in the fourth quarter of 2024, no goodwill impairments were identified.
Year 2023:
During the third quarter of 2023, the Company concluded that a triggering event occurred, primarily due to a sustained decrease in the market value of the Company’s debt and common stock affecting the overall business and changes in expected future cash flows due to reduced earnings forecasts and current macroeconomic conditions, including a rising interest rate environment. As a result, the Company performed an interim quantitative goodwill impairment test for its Aurora (formerly ANS) reporting unit and recorded a goodwill impairment charge of $ 425.9 million in asset impairments on the Consolidated Statements of Operations to partially write down the carrying amount of the goodwill in the Aurora reporting unit. The Aurora reporting unit is the same as the Aurora segment. The fair value of the reporting unit was determined using Level 3 valuation inputs.
During the annual impairment test performed in the fourth quarter of 2023 and in conjunction with the development of the Company’s 2024 and long-range plans, the Company determined the goodwill balance in the Aurora reporting unit was impaired and recorded a partial impairment charge of $ 46.4 million in asset impairments on the Consolidated Statements of Operations. The impairment charge resulted from the Company’s assessment of further lower revenue growth and EBITDA margins in the fourth quarter of 2023, due to adverse impacts of market conditions on the current year profitability and estimated future business results and cash flows. The fair value of the reporting unit was determined using Level 3 valuation inputs.
6. REVENUE FROM CONTRACTS WITH CUSTOMERS
Disaggregated Net Sales
For the presentation of net sales by segment and geographic region, see Note 17 included in these consolidated financial statements.
81
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
Allowance for Doubtful Accounts
Year Ended December 31,
2025
2024
2023
Allowance for doubtful accounts, beginning of period
$
1.6
$
6.5
$
9.9
Benefit
( 0.1
)
( 3.7
)
( 3.2
)
Write-offs
—
( 1.0
)
( 0.5
)
Foreign exchange and other
0.1
( 0.2
)
0.3
Allowance for doubtful accounts, end of period
$
1.6
$
1.6
$
6.5
Customer Contract Balances
The following table provides the balance sheet location and amounts of contract assets, or unbilled accounts receivable, and contract liabilities, or deferred revenue, from contracts with customers as of December 31, 2025 and December 31, 2024.
Contract Balance Type
Balance Sheet Location
2025
2024
Unbilled accounts receivable
Accounts receivable, net of allowance
for doubtful accounts
$
9.4
$
10.3
Deferred revenue – current
Accrued and other liabilities
$
106.5
$
94.7
Deferred revenue – noncurrent
Other noncurrent liabilities
93.7
84.2
Total contract liabilities
$
200.2
$
178.9
There were no material changes to contract asset balances for the year ended December 31, 2025 as a result of changes in estimates or impairments. The change in the contract liability balance from December 31, 2024 to December 31, 2025 was primarily due to upfront support billings to be recognized over the support term. During the year ended December 31, 2025 , the Company recognized $ 98.2 million of revenue related to contract liabilities recorded as of December 31, 2024 .
7. LEASES
The Company has operating type leases for real estate, equipment and vehicles both in the U.S. and internationally. As of December 31, 2025 and 2024 , the Company had no finance type leases. Operating lease expense was $ 25.6 million, $ 26.5 million and $ 32.7 million for the years ended December 31, 2025, 2024 and 2023 , respectively. Operating lease expense included period cost for short-term, cancellable and variable leases that were not included in lease liabilities of $ 4.6 million, $ 9.4 million and $ 16.7 million for the years ended December 31, 2025, 2024 and 2023, respectively.
The Company occasionally subleases all or a portion of certain unutilized real estate facilities. As of December 31, 2025, the Company’s sublease arrangements were classified as operating type leases and the income amounts were not material for the years ended December 31, 2025, 2024 and 2023, respectively.
Supplemental cash flow information related to operating leases, which includes both continuing operations and discontinued operations:
Year Ended December 31,
2025
2024
2023
Operating cash paid to settle lease liabilities
$
51.5
$
52.6
$
57.7
Right of use asset additions in exchange for lease liabilities
23.2
25.9
63.2
82
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
Supplemental balance sheet information related to operating leases:
December, 31
Balance Sheet Location
2025
2024
Right of use assets
Other noncurrent assets
$
57.1
$
61.3
Lease liabilities – current
Accrued and other liabilities
$
13.9
$
14.8
Lease liabilities – noncurrent
Other noncurrent liabilities
55.5
58.5
Total lease liabilities
$
69.4
$
73.3
Weighted average remaining lease term (in years)
6.1
Weighted average discount rate
8.3
%
Future minimum lease payments under non-cancellable leases as of December 31, 2025 are as follows:
Operating Leases
2026
$
19.5
2027
14.6
2028
11.5
2029
10.7
2030
9.4
Thereafter
21.9
Total minimum lease payments
87.6
Less: imputed interest
( 18.2
)
Total
$
69.4
8. SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION
Inventories
December 31,
2025
2024
Raw materials
$
133.7
$
206.3
Work in process
38.1
41.6
Finished goods
138.6
155.1
Total inventories, net
$
310.4
$
403.0
Property, Plant and Equipment
December 31,
2025
2024
Land and land improvements
$
3.8
$
4.2
Buildings and improvements
76.2
90.6
Machinery and equipment
141.0
238.4
Construction in progress
12.1
4.8
233.1
338.0
Accumulated depreciation
( 174.5
)
( 255.8
)
Total property, plant and equipment, net
$
58.6
$
82.2
83
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
During the year ended December 31, 2025, the Company wrote off approximately $ 25.4 million of gross cost and accumulated depreciation related to fully depreciated property, plant and equipment.
Depreciation expense was $ 21.2 million, $ 31.5 million and $ 46.4 million during the years ended December 31, 2025, 2024 and 2023 , respectively. No interest was capitalized during the years ended December 31, 2025, 2024 or 2023.
Accrued and Other Liabilities
December 31,
2025
2024
Compensation and employee benefit liabilities
$
162.7
$
88.2
Deferred revenue
106.5
94.7
Accrued interest
78.1
112.4
Operating lease liabilities
13.9
14.8
Product warranty accrual
16.4
12.2
Other
120.7
134.7
Total accrued and other liabilities
$
498.3
$
457.0
Accumulated Other Comprehensive Loss (AOCL)
The following table presents changes in AOCL, net of tax:
Year Ended December 31,
2025
2024
Foreign currency translation
Balance at beginning of period
$
( 308.8
)
$
( 232.4
)
Other comprehensive income (loss)
126.9
( 103.6
)
Amounts reclassified from AOCL
100.3
27.2
Balance at end of period
$
( 81.6
)
$
( 308.8
)
Defined benefit plan activity
Balance at beginning of period
$
( 15.5
)
$
( 14.9
)
Other comprehensive loss
( 2.4
)
( 0.3
)
Amounts reclassified from AOCL
( 0.8
)
( 0.3
)
Balance at end of period
$
( 18.7
)
$
( 15.5
)
Hedging instruments
Balance at beginning of period
$
( 20.2
)
$
( 19.4
)
Other comprehensive loss
( 0.5
)
( 0.8
)
Amounts reclassified from AOCL
2.3
—
Balance at end of period
$
( 18.4
)
$
( 20.2
)
Net AOCL at end of period
$
( 118.7
)
$
( 344.5
)
During the year ended December 31, 2025 , $ 2.2 million of foreign currency translation related to the divestiture of the OneCell business was reclassified from net AOCL and recorded in other on the Consolidated Statements of Operations. During the year ended December 31 , 2025 and 2024, $ 97.9 million and $ 27.4 million, respectively, of foreign currency translation related to the divestitures of the Company’s discontinued operations were reclassified from net AOCL and recorded in the gain (loss) on disposal of discontinued operations before income taxes, included in income (loss) from discontinued operations, net of income taxes, on the Consolidated Statements of Operations. In addition, $ 2.3 million of net losses remaining as a component of net AOCL related to the discontinued interest rate hedging instruments, was reclassified from net AOCL and recorded in interest expense, included in income (loss) from discontinued operations, net of income taxes on the Consolidated Statements of Operations. For further discussions of the Company’s divestitures, see Note 4 included in these consolidated financial statements.
84
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
Cash Flow Information
Year Ended December 31,
2025
2024
2023
Cash paid during the period for:
Income taxes, net of refunds
$
204.6
$
100.4
$
101.1
Interest
640.4
649.8
654.0
Non-cash investing activities:
Equity method investment from divestiture
—
17.0
—
9. FINANCING
December 31,
2025
2024
7.125 % senior notes due July 2028
$
641.6
$
641.6
5.00 % senior notes due March 2027
750.0
750.0
8.25 % senior notes due March 2027
866.9
866.9
9.50 % senior secured notes due December 2031
1,000.0
1,000.0
4.75 % senior secured notes due September 2029
951.0
1,250.0
6.00 % senior secured notes due March 2026
—
1,500.0
Senior secured term loan due December 2029
3,150.0
3,150.0
Senior secured revolving credit facility
—
200.0
Total principal amount of debt
7,359.5
9,358.5
Less: Original issue discount, net of amortization
( 51.9
)
( 60.5
)
Less: Debt issuance costs, net of amortization
( 47.4
)
( 59.6
)
Less: Current portion
—
—
Total long-term debt
$
7,260.2
$
9,238.4
In January 2025, the Company used the proceeds from the sale of the OWN segment and DAS business unit to pay fees and expenses associated with the transaction and to repay the outstanding amount of $ 250.0 million under the Company’s asset-based revolving credit facility (the Revolving Credit Facility). In connection with the repayment of all outstanding amounts under the Revolving Credit Facility, the committed amount thereunder was reduced to $ 750.0 million, subject to borrowing base limitations. In addition, in February 2025, the Company repurchased $ 299.0 million in aggregate principal amount of the 4.75 % senior secured notes due September 1, 2029 (the 2029 Secured Notes) and repurchased in full the $ 1,500.0 million outstanding amount of the 6.00 % senior secured notes due March 1, 2026 (the 2026 Secured Notes) with the proceeds from the sale. Following the repurchases, $ 951.0 million in aggregate principal amount of the 2029 Secured Notes remained outstanding, and the indenture governing the 2026 Secured Notes was satisfied and discharged. Following the consummation of the repurchases in February 2025, the conditions precedent were met for a 25 basis point reduction in the applicable margin on the senior secured term loan due December 2029 (the 2029 Term Loan).
In connection with the sale of the CCS segment that was completed subsequent to fiscal year end on January 9, 2026, the Company repaid in full all outstanding indebtedness. For further discussion of the sale of the CCS segment, see Note 19 in these consolidated financial statements.
Other Matters
The Company is dependent upon the earnings and cash flow of its subsidiaries to make certain payments, including debt and interest payments. Certain subsidiaries may have limitations or restrictions on transferring funds to other subsidiaries that may be necessary to meet those requirements.
The weighted average effective interest rate on outstanding borrowings, including the impact of the interest rate swap contracts and the amortization of debt issuance costs and original issue discount, was 8.13 % and 8.09 % at December 31, 2025 and 2024, respectively .
85
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
10. FAIR VALUE MEASUREMENTS
The Company’s financial instruments consist primarily of cash and cash equivalents, trade receivables, trade payables, debt instruments, interest rate swap contracts and foreign currency contracts. For cash and cash equivalents, trade receivables and trade payables, the carrying amounts of these financial instruments as of December 31, 2025 and 2024 were considered representative of their fair values due to their short terms to maturity. The fair values of the Company’s debt instruments, interest rate swap contracts and foreign currency contracts were based on indicative quotes.
Fair value measurements using quoted prices in active markets for identical assets and liabilities fall within Level 1 of the fair value hierarchy, measurements using significant other observable inputs fall within Level 2, and measurements using significant unobservable inputs fall within Level 3.
The carrying amounts, estimated fair values and valuation input levels of the Company’s debt instruments, interest rate derivatives and foreign currency contracts as of December 31, 2025 and 2024, are as follows:
December 31, 2025
December 31, 2024
Carrying
Amount
Fair Value
Carrying
Amount
Fair Value
Valuation
Inputs
Assets:
Foreign currency contracts
$
0.4
$
0.4
$
—
$
—
Level 2
Liabilities:
7.125% senior notes due 2028
$
641.6
$
644.0
$
641.6
$
561.4
Level 2
5.00% senior notes due 2027
750.0
747.7
750.0
669.5
Level 2
8.25% senior notes due 2027
866.9
868.2
866.9
826.8
Level 2
9.50% senior secured notes due 2031
1,000.0
1,010.0
1,000.0
1,035.0
Level 2
4.75% senior secured notes due 2029
951.0
949.2
1,250.0
1,117.2
Level 2
6.00% senior secured notes due 2026
—
—
1,500.0
1,486.9
Level 2
Senior secured term loan due 2029
3,150.0
3,161.8
3,150.0
3,189.4
Level 2
Senior secured revolving credit facility
—
—
200.0
190.0
Level 2
Foreign currency contracts
—
—
3.4
3.4
Level 2
Interest rate swap contracts
2.9
2.9
2.4
2.4
Level 2
Non-Recurring Fair Value Measurements
For non-recurring fair value measurement discussions related to the discontinued operations, see Note 4 in these consolidated financial statements.
During the first quarter of 2024, the Company recognized a loss on impairment of unutilized real estate within restructuring costs, net on the Consolidated Statements of Operations. The fair value was determined using Level 3 valuation inputs.
The Company recorded the assets acquired and liabilities assumed from the Casa transaction during the second quarter of 2024, as well as the respective measurement adjustments in the third and fourth quarters of 2024, and first quarter of 2025. The fair values were determined using Level 3 valuation inputs. See Note 3 in these consolidated financial statements.
These fair value estimates are based on pertinent information available to management as of the valuation date. Although management is not aware of any factors that would significantly affect these fair value estimates, such amounts have not been comprehensively revalued for purposes of these financial statements since those dates, and current estimates of fair value may differ significantly from the amounts presented.
11. RESTRUCTURING COSTS
The Company incurs costs associated with restructuring initiatives intended to improve overall operating performance and profitability. The costs related to restructuring actions are generally cash-based and primarily consist of employee-related costs, which include severance and other one-time termination benefits.
86
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
In addition to the employee-related costs, the Company records other costs associated with restructuring actions such as the gain or loss on the sale of facilities and impairment costs arising from unutilized real estate or equipment. The Company attempts to sell or lease this unutilized space but additional impairment charges may be incurred related to these or other excess assets.
The Company’s net pretax restructuring activity included in restructuring costs, net on the Consolidated Statements of Operations, by segment, was as follows:
Year Ended December 31,
2025
2024
2023
RUCKUS
$
4.7
$
2.3
$
7.5
Aurora
11.0
32.7
( 5.8
)
Corporate and other (1)
4.0
1.7
27.7
Total
$
19.7
$
36.7
$
29.4
(1) The corporate and other line item above reflects general corporate restructuring costs that were previously allocated to the CCS segment, OWN segment, DAS business unit and Home segment. These indirect expenses have been classified as continuing operations for all periods presented since the costs were not directly attributable to these discontinued operations. Beginning in the first quarter of 2024, the corporate and other costs related to the Home segment have been reallocated to the Company’s remaining segments and partially offset by income from the Vantiva TSA. Beginning in the first quarter of 2025, the corporate and other costs related to the OWN segment and DAS business unit have been reallocated to the Company’s remaining segments and partially offset by income from the Amphenol TSA. The corporate and other costs related to the CCS segment will be reallocated to the Company’s remaining segments beginning in the first quarter of 2026.
The Company expects to make cash payments of $ 4.6 million in 2026 and $ 0.3 million during 2027 to settle these restructuring actions. Additional restructuring actions related to the transformation initiative are expected to be identified, and the resulting charges and cash requirements could be material.
12. EMPLOYEE BENEFIT PLANS
Defined Contribution Plans
The Company and certain of its subsidiaries have defined contribution retirement savings plans, the most significant of which is a 401(k) plan in the U.S. These plans allow employees meeting certain requirements to contribute a portion of their compensation on a pretax and/or after-tax basis in accordance with guidelines established by the plans and the Internal Revenue Service or other tax authorities. The Company matches a percentage of the employee contributions up to certain limits. During the years ended December 31, 2025, 2024 and 2023 , the Company made contributions to defined contribution retirement savings plans of $ 8.4 million, $ 13.4 million and $ 8.9 million, respectively.
The Company also maintains noncontributory and contributory deferred compensation plans. During the years ended December 31, 2025, 2024 and 2023 , the Company recognized pretax costs (benefits) of $( 0.1 ) million, $( 0.8 ) million and $ 0.7 million, respectively, related to these plans. The liability related to these plans was $ 7.3 million and $ 9.5 million as of December 31, 2025 and 2024 , respectively.
13. INCOME TAXES
Income (loss) from continuing operations before income taxes includes the results from domestic and international operations as follows:
Year Ended December 31,
2025
2024
2023
U.S. companies
$
17.9
$
( 298.9
)
$
( 575.1
)
Non-U.S. companies
37.0
26.0
2.1
Income (loss) from continuing operations before income taxes
$
54.9
$
( 272.9
)
$
( 573.0
)
87
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
The components of income tax expense (benefit) were as follows:
Year Ended December 31,
2025
2024
2023
Current:
Federal
$
( 130.5
)
$
( 81.2
)
$
70.1
Foreign
33.4
19.3
44.1
State
( 24.6
)
( 15.6
)
( 4.4
)
Current income tax expense (benefit)
$
( 121.7
)
$
( 77.5
)
$
109.8
Deferred:
Federal
$
( 106.7
)
$
( 30.7
)
$
( 24.5
)
Foreign
( 19.6
)
6.3
( 23.4
)
State
( 21.4
)
35.0
17.9
Deferred income tax expense (benefit)
( 147.7
)
10.6
( 30.0
)
Total income tax expense (benefit)
$
( 269.4
)
$
( 66.9
)
$
79.8
The following table reflects the effective income tax rate reconciliation for the year ended December 31, 2025 (ASU 2023-09) (Prospective Adoption):
Amount
% of Statutory
Tax
Pre-tax book income
$
54.9
U.S. federal statutory tax rate
11.5
21.0
%
State and local income taxes, net of federal income tax effect (1)
( 41.2
)
- 74.9
%
Foreign tax effects:
United Kingdom:
Statutory tax rate difference between United Kingdom & United States
0.8
1.4
%
Foreign tax credit
( 1.3
)
- 2.3
%
Other
1.2
2.3
%
Other foreign jurisdictions
3.6
6.5
%
Subpart F income net of U.S. foreign tax credits
0.7
1.3
%
Unremitted earnings
1.8
3.2
%
Tax credits:
U.S. R&D credit
( 8.0
)
- 14.5
%
U.S. foreign tax credits
( 1.0
)
- 1.9
%
Changes in valuation allowances
( 259.8
)
- 472.9
%
Nontaxable or nondeductible items:
Nondeductible compensation
25.6
46.6
%
Equity-based compensation awards
( 5.5
)
- 10.1
%
Other
0.8
1.4
%
Changes in unrecognized tax benefits
1.4
2.5
%
Income tax provision
$
( 269.4
)
- 490.4
%
(1) The U.S. states and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include California, Georgia, Illinois, New Jersey and Tennessee.
The Company adopted ASU 2023-09 prospectively beginning in fiscal year 2025. As permitted by the standard, prior-period disclosures have not been retrospectively adjusted. The reconciliation of income taxes attributable to operations at the applicable U.S. federal statutory tax rates to income tax expense for periods prior to adoption reflects the presentation required under legacy ASC 740 and is not directly comparable to the current year presentation.
88
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
Year Ended December 31,
2024
2023
Provision for income taxes at federal statutory rate
$
( 56.7
)
$
( 121.3
)
State income taxes, net of federal tax effect
( 13.9
)
( 8.7
)
Other permanent items
0.7
0.7
Equity-based compensation
7.2
7.0
Other changes in tax laws and tax rulings
0.2
( 4.1
)
Goodwill related items
—
97.8
Base erosion and anti-abuse tax
4.3
—
Federal tax credits
( 12.4
)
( 13.6
)
Change in unrecognized tax benefits
( 9.4
)
( 3.4
)
Withholding taxes and Subpart F income, net of foreign tax credits
15.2
12.8
Foreign earnings taxed at other than federal rate
( 3.8
)
4.4
Tax provision adjustments and revisions to prior years ʾ returns
( 5.1
)
13.2
Change in valuation allowance
6.8
95.0
Total provision for income taxes
$
( 66.9
)
$
79.8
Cash paid for income taxes, net of refunds received by jurisdiction pursuant to the disclosure requirements of ASU 2023-09, is as follows:
Year Ended December 31,
2025
Federal
$
107.4
State
22.6
Foreign:
Mexico
18.0
United Kingdom
10.4
Other
46.2
Cash paid for income taxes, net of refunds received
$
204.6
89
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
The components of deferred income tax assets and liabilities and the classification of deferred tax balances on the balance sheet were as follows:
December 31,
2025
2024
Deferred tax assets:
Accounts receivable, inventory and warranty reserves
$
83.0
$
107.2
Property, plant and equipment
8.3
9.4
Employee benefits
10.4
29.7
Foreign net operating loss and tax credit carryforwards
6.5
27.3
Federal net operating loss and tax credit carryforwards
3.3
3.3
State net operating loss and tax credit carryforwards
93.9
80.5
Interest limitation
236.7
260.3
Capitalized research and development costs
144.1
371.6
Basis difference in U.S. subsidiaries (1)
1,337.9
—
Other
52.9
76.5
Total deferred tax assets
1,977.0
965.8
Valuation allowance
( 97.0
)
( 356.8
)
Total deferred tax assets, net of valuation allowance
$
1,880.0
$
609.0
Deferred tax liabilities:
Intangible assets
$
( 176.3
)
$
( 249.8
)
Undistributed foreign earnings
( 5.0
)
( 18.6
)
Total deferred tax liabilities
( 181.3
)
( 268.4
)
Net deferred tax asset
$
1,698.7
$
340.6
Deferred taxes recognized on the balance sheet:
Noncurrent deferred tax asset
$
1,765.9
$
431.5
Noncurrent deferred tax liability
( 67.2
)
( 90.9
)
Net deferred tax asset
$
1,698.7
$
340.6
(1) The deferred tax asset for the basis difference in U.S. subsidiaries as of December 31, 2025 relates to the difference between the carrying value of the net assets comprising the CCS segment classified as held for sale and the tax basis of the Company’s investment in the U.S. subsidiaries being sold. Because the basis difference was directly attributable to the CCS segment, the Company recognized the related income tax benefit within income from discontinued operations, net of income taxes, in the fourth quarter of 2025, as it was probable the associated tax benefit would be realized upon sale of the CCS segment in the first quarter of 2026. The deferred tax asset will remain with and be settled by the Company; therefore, it is classified as a deferred income tax asset on the Consolidated Balance Sheet as of December 31, 2025.
The deferred tax asset for foreign net operating loss and tax credit carryforwards as of December 31, 2025 includes foreign net operating loss carryforwards (net of federal tax effects) of $ 5.1 million, which have no expiration date, and foreign tax credit carryforwards (net of federal tax effects) of $ 1.4 million, which begin to expire in 2026 . Certain of these foreign net operating loss carryforwards are subject to local restrictions limiting their utilization. Valuation allowances of $ 3.7 million have been established related to these foreign deferred tax assets.
T he deferred tax asset for federal net operating loss and tax credit carryforwards as of December 31, 2025 relates to $ 2.2 million of net operating loss carryforwards, which begin to expire in 2032 , and $ 1.1 million of U.S. foreign tax credit carryforwards, which begin to expire in 2029 . A valuation allowance of $ 0.1 million has been established against these deferred tax assets.
The deferred tax asset for state net operating loss and tax credit carryforwards as of December 31, 2025 includes state net operating loss carryforwards (net of federal tax impact) of $ 35.6 million, which begin to expire in 2026 , and state tax credit carryforwards (net of federal tax impact) of $ 58.3 million, which begin to expire in 2026 . A valuation allowance of $ 91.0 million has been established against these and other state income tax related deferred tax assets.
90
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
The deferred tax asset for federal and state interest limitation carryforwards as of December 31, 2025 is $ 236.7 million, which has an indefinite carryforward. A valuation allowance of $ 1.8 million has been established against the state deferred tax assets.
In 2025, the Company released approximately $ 260.0 million of valuation allowance that had been established against federal and state deferred tax assets primarily related to interest limitation carryforwards.
Under current U.S. tax regulations, repatriation of foreign earnings to the U.S. can generally be completed with no incremental U.S. tax. However, repatriation of foreign earnings could subject the Company to U.S. state and non-U.S. jurisdictional taxes (including withholding taxes) on distributions. As of December 31, 2025, the Company has a deferred tax liability of $ 5.0 million for the estimated foreign costs associated with the expected repatriation of the Company’s undistributed foreign earnings. The unrecorded deferred tax liability for foreign costs associated with earnings considered permanently reinvested is not material as of December 31, 2025 .
The following table reflects a reconciliation of the beginning to ending period amounts of gross unrecognized tax benefits, excluding interest and penalties:
Year Ended December 31,
2025
2024
2023
Balance at beginning of period
$
146.3
$
162.1
$
145.5
Increase related to prior periods
( 0.1
)
—
22.5
Decrease related to prior periods
0.9
( 0.9
)
( 7.9
)
Increase related to current periods
2.7
3.3
5.5
Decrease related to settlements with taxing authorities
3.5
—
( 0.3
)
Decrease related to lapse in statutes of limitations
( 12.2
)
( 14.2
)
( 3.2
)
Decrease related to divestitures
( 1.0
)
( 4.0
)
—
Balance at end of period
$
140.1
$
146.3
$
162.1
The Company’s liability for unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate in future periods was $ 130.1 million as of December 31, 2025. The Company operates in numerous jurisdictions worldwide and is subject to routine tax audits on a regular basis. The determination of the Company’s unrecognized tax benefits involves significant management judgment regarding interpretation of relevant facts and tax laws in each of these jurisdictions.
The Company provides for interest and penalties related to unrecognized tax benefits as income tax expense. The Company accrued $ 7.1 million and $ 5.9 million for interest and penalties as of December 31, 2025 and 2024, respectively. During the years ended December 31, 2025, 2024 and 2023, the net expense (benefit) for interest and penalties recognized through income tax expense (benefit) was $ 3.1 million, $ 0.5 million and $( 4.0 ) million, respectively.
The Company files federal, state and local tax returns with statutes of limitation generally ranging from 3 to 4 years. The Company is currently undergoing a U.S. federal income tax audit for the 2019 tax year and is generally no longer subject to state and local tax examinations for years prior to 2021. Tax returns filed by the Company’s significant foreign subsidiaries are generally subject to statutes of limitation of 3 to 7 years and are generally no longer subject to examination for years prior to 2019. In many jurisdictions, tax authorities retain the ability to review prior years’ tax returns and to adjust any net operating loss or tax credit carryforwards from these years that are available to be utilized in subsequent periods. During 2025, the Company recognized $( 8.6 ) million (net of payments) related to the lapse of applicable statutes of limitations and the conclusion of various domestic and foreign examinations.
The Organization for Economic Co-operation and Development has proposed a global minimum tax of 15 % under its Pillar Two Model Rules. Beginning in 2023, many countries began to incorporate Pillar Two into their domestic laws with Pillar Two becoming effective in some countries beginning in 2024. In 2025, the company incurred insignificant tax expense in connection with Pillar Two. On January 5, 2026, the OECD released a comprehensive package for a “side-by-side arrangement” with respect to Pillar Two. Notably, once adopted, this new guidance will prevent other countries from imposing tax on the U.S. profits of American companies. The Company will continue to monitor U.S. and international legislative developments, including further announcements on the side-by-side package, to assess any potential impacts on its operations.
91
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
On July 4, 2025, U.S. legislation formally titled “An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14” (the Act), commonly referred to as the One Big Beautiful Bill Act, was signed into law. The Act, among other provisions, extended certain key elements of the 2017 Tax Cuts and Jobs Act and introduced targeted changes to the U.S. federal income tax regime. The effects of OBBBA are reflected in the consolidated financial statements for the year ended December 31, 2025 .
The following table presents income tax expense (benefit) related to amounts presented in other comprehensive income (loss):
Year Ended December 31,
2025
2024
2023
Foreign currency translation
$
2.4
$
( 2.3
)
$
( 2.9
)
Defined benefit plans
( 0.8
)
( 0.1
)
( 0.3
)
Total
$
1.6
$
( 2.4
)
$
( 3.2
)
14. SERIES A CONVERTIBLE PREFERRED STOCK
On April 4, 2019, the Company issued and sold 1,000,000 shares of the Series A Convertible Preferred Stock (Convertible Preferred Stock) for $ 1.0 billion, or $ 1,000 per share, pursuant to an Investment Agreement between the Company and The Carlyle Group (Carlyle), dated November 8, 2018 (the Investment Agreement). As of December 31, 2025 , the Company had authorized 1,400,000 shares of Convertible Preferred Stock.
In connection with the sale of the CCS segment that was completed subsequent to fiscal year end on January 9, 2026, the Company has redeemed its Convertible Preferred Stock. For further discussion of the sale of the CCS segment, see Note 19 in these consolidated financial statements.
Dividend Rights
The Convertible Preferred Stock ranked senior to the shares of the Company’s common stock with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. The Convertible Preferred Stock had a liquidation preference of $ 1,000 per share. Holders of the Convertible Preferred Stock were entitled to a cumulative dividend at the rate of 5.5 % per year, payable quarterly in arrears. If the Company did not declare and pay a dividend, the dividend rate would increase by 2.5 % to 8.0 % per year (and that rate would increase by an additional 0.50 % every three months until such unpaid dividend is declared and paid, subject to a cap of 11.0 % per year) until all accrued but unpaid dividends have been paid in full. Dividends were payable in cash, in-kind through the issuance of additional shares of Convertible Preferred Stock or any combination of the two, at the Company’s option.
During the years ended December 31, 2025, 2024 and 2023 , the Company paid dividends in-kind of $ 51.3 million, $ 65.2 million and $ 61.8 million, respectively, which were recorded as additional Convertible Preferred Stock on the Consolidated Balance Sheets. The Company paid a cash dividend of $ 17.6 million for the year ended December 31, 2025 but did no t pay cash dividends for each of the years ended December 31, 2024 and 2023.
15. STOCKHOLDERS’ EQUITY
Equity-Based Compensation Plans
In 2019, the Company’s stockholders approved the 2019 Long-Term Incentive Plan authorizing 8.0 million shares for issuance, plus additional shares underlying awards outstanding under the predecessor plans. Subsequently, in each of the years 2020 through 2025, the Company’s stockholders approved the Amended and Restated 2019 Long-Term Incentive Plan (the 2019 Plan) and authorized an additional aggregate 40.25 million shares for issuance. All future equity awards will be made from the 2019 Plan. Awards under the 2019 Plan may include stock options, stock appreciation rights, restricted stock, stock units (including RSUs) and deferred stock units), performance awards (represents any of the awards already listed with a performance-vesting component), other stock-based awards and cash-based awards. As of December 31, 2025 , there were 9.2 million shares available for future grants under the 2019 Plan.
92
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
As of December 31, 2025 , $ 29.1 million of total unrecognized compensation expense related to unvested stock options, RSUs and performance share units (PSUs) is expected to be recognized over a remaining weighted average period of 1.9 years. There were no significant capitalized equity-based compensation costs at December 31, 2025.
The following table shows a summary of the equity-based compensation expense included on the Consolidated Statements of Operations:
Year Ended December 31,
2025
2024
2023
Selling, general and administrative
$
26.8
$
15.2
$
20.6
Research and development
2.6
3.2
7.8
Cost of sales
1.0
1.1
2.9
Total equity-based compensation expense
$
30.4
$
19.5
$
31.3
The Company believes the valuation techniques and the approaches utilized to develop the underlying assumptions are appropriate in estimating the fair values of its equity-based compensation. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive equity awards. Subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company.
Stock Options
Stock options are awards that allow the recipient to purchase shares of the Company’s common stock at a fixed price. Stock options are granted at an exercise price equal to the Company’s stock price at the date of grant. The Company uses the Black-Scholes model to estimate the fair value of stock options at the date of grant. These awards generally vest over five years following the grant date and have a contractual term of ten years . There were 0.3 million options outstanding as of December 31, 2025 with no intrinsic value and the majority were vested. There were no stock options granted during the years ended December 31, 2025, 2024 or 2023. The intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023 was not material.
Restricted Stock Units
RSUs entitle the holder to shares of common stock after a vesting period of generally three years . The fair value of the awards is determined on the grant date based on the Company’s stock price.
The following table summarizes the RSU activity (in millions, except per share data):
Restricted
Stock Units
Weighted
Average Grant
Date Fair Value
Per Share
Non-vested share units at December 31, 2024
11.4
$
2.84
Granted
3.7
$
6.14
Vested and shares issued
( 5.5
)
$
3.79
Forfeited
( 1.1
)
$
3.45
Non-vested share units at December 31, 2025
8.5
$
3.59
The weighted average grant date fair value per unit of these awards granted during the years ended December 31, 2025, 2024 and 2023 was $ 6.14 , $ 1.40 and $ 4.68 , respectively. The total fair value of RSUs that vested during the years ended December 31, 2025, 2024 and 2023 was $ 21.0 million, $ 25.7 million and $ 40.0 million, respectively.
Performance Share Units
PSUs are stock awards in which the number of shares ultimately received by the employee depends on achievement toward a performance measure. Certain of the Company’s PSUs have an internal performance measure and vest at the end of three years, with the number of shares issued varying between 0 % and 200 % of the units granted. Beginning in 2025, the Company also granted PSUs
93
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
that vest over three years but are earned based on annual performance periods; these awards are divided into three equal tranches, each tied to the applicable annual internal performance measure, with each tranche payable between 0 % and 200 % of the units granted. The fair value of all such awards is determined on the date of grant based on the Company’s stock price.
The Company also has PSUs with a market condition based on the Company’s total stockholder return (TSR) ranking relative to the S&P 500 TSR for a three-year period. The number of shares issued under these awards can vary between 0 % to 200 % of the number of PSUs granted. The Company uses a Monte Carlo simulation model to estimate the fair value of PSUs with a market condition performance measure at the date of grant. Key assumptions used in the model include the risk-free interest rate, which reflects the yield on zero-coupon U.S. treasury securities, and stock price volatility, which is derived based on the historical volatility of the Company’s stock.
During the year ended December 31, 2025, certain PSUs expired as the market condition based on the Company’s TSR ranking relative to the S&P 500 TSR was not met. Consequently, no shares were issued related to these awards. In addition, in 2025, we recognized incremental stock‑based compensation expense related to certain TSR awards for which the service condition was accelerated, resulting in total performance attainment of 175 % for the period.
The following table summarizes the PSU activity (in millions, except per share data):
Performance
Share Units
Weighted
Average Grant
Date Fair Value
Per Share
Non-vested share units at December 31, 2024
3.4
$
7.30
Granted
1.8
$
6.33
Performance award achievement adjustment
0.3
$
9.69
Vested and shares issued
( 2.0
)
$
8.40
Expired
( 0.4
)
$
10.33
Forfeited
( 0.5
)
$
6.68
Non-vested share units at December 31, 2025
2.6
$
5.77
The weighted average grant date fair value per unit of these awards granted during the years ended December 31, 2025 and 2023 was $ 6.33 and $ 6.14 , respectively. No PSUs were granted during the year ended December 31, 2024. The total fair value of PSUs that vested during the year ended December 31, 2025 was $ 16.4 million. No PSUs vested during the year ended December 31, 2024. The total fair value of PSUs that vested during the year ended December 31, 2023, was no t material .
16. COMMITMENTS AND CONTINGENCIES
The following table summarizes the activity in the product warranty accrual, included in accrued and other liabilities and other noncurrent liabilities:
Year Ended December 31,
2025
2024
2023
Product warranty accrual, beginning of period
$
14.3
$
16.0
$
23.8
Provision for warranty claims
14.1
13.8
4.4
Warranty claims paid
( 10.2
)
( 15.5
)
( 12.3
)
Foreign exchange
—
—
0.1
Product warranty accrual, end of period
$
18.2
$
14.3
$
16.0
94
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
Legal Proceedings
The Company is a party to certain intellectual property claims and also periodically receives notices asserting that its products infringe on another party’s patents and other intellectual property rights. These claims and assertions, whether against the Company directly or against its customers, could require the Company to pay damages or royalties, stop offering the relevant products and/or cease other activities. The Company may also be called upon to indemnify certain customers for costs related to products sold to such customers. The outcome of these claims and notices is uncertain, and a reasonable estimate of the loss from unfavorable outcomes in certain of these matters either cannot be determined or is estimated at the minimum amount of a range of estimates. The actual loss, through settlement or trial, could be material and may vary significantly from the Company’s estimates. From time to time, the Company may also be involved as a plaintiff in intellectual property claims. Gain contingencies, if any, are recognized when they are realized.
The Company is either a plaintiff or a defendant in certain other pending legal matters in the normal course of business. Management believes none of these other pending legal matters will have a material adverse effect on the Company’s business or financial condition upon final disposition.
The Company is subject to various federal, state, local and foreign laws and regulations governing the use, discharge, disposal and remediation of hazardous materials. Compliance with current laws and regulations has not had, and is not expected to have, a materially adverse effect on the Company’s financial condition or results of operations.
17. INDUSTRY SEGMENTS, MAJOR CUSTOMERS, RELATED PARTY TRANSACTIONS AND GEOGRAPHIC INFORMATION
Segment Information
The following is a brief description of the activities of the Company's reportable segments:
RUCKUS - The segment provides wireless networks for enterprises and service providers. Product offerings include indoor cellular solutions such as indoor and outdoor Wi-Fi and long-term evolution (LTE) access points, access and aggregation switches; an Internet of Things suite, on-premises and cloud-based control and management systems; and software and software-as-a-service applications addressing security, location, reporting and analytics.
Aurora - The segment’s product solutions include cable modem termination systems, video infrastructure, public key infrastructure solutions, distribution and transmission equipment and cloud solutions that enable facility-based service providers to construct a state-of-the-art residential and metro distribution network.
Refer to Note 1 for discussion of product shifts and divestitures impacting the Company’s operating and reportable segment structure.
The following table provides summary financial information by reportable segment
December 31,
2025
2024
Identifiable segment-related assets: (1)
RUCKUS
$
839.6
$
886.5
Aurora
1,629.3
1,688.9
Total identifiable segment-related assets
2,468.9
2,575.4
Reconciliation to total assets:
Cash and cash equivalents
754.4
404.1
Deferred income tax assets
1,765.9
431.5
Divested and other business assets (2)
57.3
140.4
Assets held for sale
4,324.5
5,196.1
Total assets
$
9,371.0
$
8,747.5
95
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
(1) Assets related to reportable segments largely include accounts receivable, inventories, property, plant and equipment, goodwill, intangible assets and certain limited other assets. All other items are reflected in Corporate and other. Accounts receivable and inventory are ascribed based on underlying sales or activity. Property, plant and equipment are attributed to a particular business segment based on that item’s primary user and reflect an allocation of certain corporate-shared assets. Intangible assets and goodwill are largely directly associated with a particular reporting unit and attributed on that basis.
(2) The divested and other business assets line item above reflects certain inventory retained by the Company related to continuing involvement in divested businesses pursuant to the Vantiva Supply Agreement and the Amphenol MSA, as discussed in Note 4, as well as other corporate assets. As of December 31, 2025, inventory of $ 16.6 million related to the OWN segment and DAS business unit, $ 4.4 million related to the P assive Optical Network ( PON) business line within the CCS segment that was not divested with the sale of the CCS segment and $ 36.3 million related to corporate and other assets . As of December 31, 2024, inventory of $ 14.5 million related to the Home business, $ 20.3 million related to the PON business and $ 105.6 million related to corporate and other assets.
The Company organizes its reportable segments based on the nature of products and services offered. Segment information is presented on the same basis that the Company's Chief Executive Officer , who is the CODM, uses to manage its segments, evaluate financials results and make key operating decisions. The Company’s measurement of segment performance is adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization). The Company defines adjusted EBITDA as operating income (loss), adjusted to exclude depreciation, amortization of intangible assets, restructuring costs, asset impairments, equity-based compensation, transaction, transformation and integration costs and other items that the Company believes are useful to exclude in the evaluation of operating performance from period to period because these items are not representative of the Company’s recurring business.
These financial metrics are used to view operating trends, perform analytical comparisons and benchmark performance between periods and among geographic regions and monitor budget-to-actual variances on a monthly basis. To manage operations and make decisions regarding resource allocations, the Company’s CODM is regularly provided and reviews expense information at a consolidated level for each segment. Each segment has a manager responsible for executing the Company’s strategic initiatives.
The following table provides net sales, cost of sales, total operating expenses, adjusted EBITDA, depreciation expense and additions to property, plant and equipment by reportable segment for the year ended December 31, 2025:
RUCKUS (1)
Aurora
Corporate
and other (2)
Total
Net sales
$
698.9
$
1,232.7
$
—
$
1,931.6
Cost and expenses:
Segment cost of sales
241.2
709.2
24.3
Segment operating expenses
334.2
285.9
66.0
Addback: Depreciation
( 4.0
)
( 14.3
)
( 2.9
)
Segment adjusted EBITDA
127.5
251.9
( 87.4
)
292.0
Amortization of intangible assets
( 138.4
)
Restructuring costs, net
( 19.7
)
Equity-based compensation
( 30.4
)
Transaction, transformation and integration costs
( 29.9
)
Other
( 4.8
)
Depreciation
( 21.2
)
Operating income
47.6
Other expense, net
7.3
Income from continuing operations before income
taxes
$
54.9
Depreciation
$
4.0
$
14.3
$
2.9
$
21.2
Additions to property, plant and equipment
$
3.5
$
7.8
$
11.7
$
23.0
(1) Includes activity of the OneCell business for periods prior to its disposition.
96
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
(2) The corporate and other category above primarily reflects general corporate costs that were previously allocated to the CCS segment, OWN segment and DAS business unit. These indirect expenses have been classified as continuing operations, since the costs were not directly attributable to these discontinued operations. Beginning in the first quarter of 2025, the corporate and other costs related to the OWN segment and DAS business unit have been reallocated to the Company’s remaining segments and partially offset by income from the Amphenol TSA. The corporate and other costs related to the CCS segment will be reallocated to the Company’s remaining segments beginning in the first quarter of 2026.
The following table provides net sales, cost of sales, total operating expenses, adjusted EBITDA, depreciation expense and additions to property, plant and equipment by reportable segment for the year ended December 31, 2024:
RUCKUS (1)
Aurora
Corporate
and other (2)
Total
Net sales
$
546.3
$
835.8
$
0.5
$
1,382.6
Cost and expenses:
Segment cost of sales
241.4
522.3
12.7
Segment operating expenses
280.0
226.0
107.2
Addback: Depreciation
( 6.5
)
( 18.5
)
( 6.5
)
Segment adjusted EBITDA
31.4
106.0
( 112.9
)
24.5
Amortization of intangible assets
( 165.1
)
Restructuring costs, net
( 36.7
)
Equity-based compensation
( 19.5
)
Transaction, transformation and integration costs
( 63.4
)
Depreciation
( 31.5
)
Operating loss
( 291.7
)
Other expense, net
18.8
Loss from continuing operations before income taxes
$
( 272.9
)
Depreciation
$
6.5
$
18.5
$
6.5
$
31.5
Additions to property, plant and equipment
$
1.9
$
3.5
$
6.4
$
11.8
(1) Includes activity of the OneCell business for periods prior to its disposition.
(2) The corporate and other category above primarily reflects general corporate costs that were previously allocated to the CCS segment, OWN segment and DAS business unit. These indirect expenses have been classified as continuing operations, since the costs were not directly attributable to these discontinued operations. Beginning in the first quarter of 2025, the corporate and other costs related to the OWN segment and DAS business unit have been reallocated to the Company’s remaining segments and partially offset by income from the Amphenol TSA. The corporate and other costs related to the CCS segment will be reallocated to the Company’s remaining segments beginning in the first quarter of 2026.
97
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
The following table provides net sales, cost of sales, total operating expenses, adjusted EBITDA, depreciation expense and additions to property, plant and equipment by reportable segment for the year ended December 31, 2023:
RUCKUS (1)
Aurora
Corporate
and other (2)
Total
Net sales
$
767.7
$
1,095.6
$
0.5
$
1,863.8
Acquisition-related adjustments (3)
1.3
—
—
1.3
Segment net sales
769.0
1,095.6
0.5
1,865.1
Cost and expenses:
Segment cost of sales
303.1
640.3
20.5
Segment operating expenses
334.6
262.0
175.8
Addback: Depreciation
( 9.5
)
( 23.4
)
( 13.5
)
Segment adjusted EBITDA
140.8
216.7
( 182.3
)
175.2
Amortization of intangible assets
( 227.0
)
Restructuring costs, net
( 29.4
)
Equity-based compensation
( 31.3
)
Asset impairments
( 472.3
)
Transaction, transformation and integration costs
( 27.1
)
Acquisition accounting adjustments
( 1.3
)
Patent claims and litigation settlements
3.5
Recovery of Russian accounts receivable
2.0
Cyber incident costs
( 5.5
)
Depreciation
( 46.4
)
Operating loss
( 659.6
)
Other expense, net
86.6
Loss from continuing operations before income
taxes
$
( 573.0
)
Depreciation
$
9.5
$
23.4
$
13.5
$
46.4
Additions to property, plant and equipment
$
3.0
$
13.1
$
16.3
$
32.4
(1) Includes activity of the OneCell business for periods prior to its disposition.
(2) The corporate and other category above primarily reflects general corporate costs that were previously allocated to the CCS segment, OWN segment, DAS business unit and Home segment. These indirect expenses have been classified as continuing operations, since the costs were not directly attributable to these discontinued operations. Beginning in the first quarter of 2024, the corporate and other costs related to the Home segment have been reallocated to the Company’s remaining segments and partially offset by income from the Vantiva TSA. Beginning in the first quarter of 2025, the corporate and other costs related to the OWN segment and DAS business unit have been reallocated to the Company’s remaining segments and partially offset by income from the Amphenol TSA. The corporate and other costs related to the CCS segment will be reallocated to the Company’s remaining segments beginning in the first quarter of 2026.
(3) Reflects ARRIS acquisition accounting adjustments related to reducing deferred revenue to its estimated fair value.
Customer and Supplier Information
Net sales to Comcast Corporation and affiliates (Comcast) accounted for approximately 35 %, 21 % and 20 % for the years ended December 31, 2025, 2024 and 2023, respectively. Net sales to Charter Communications, Inc. (Charter) accounted for approximately 13 % and 14 % for the years ended December 31, 2024 and 2023, respectively. Other than Comcast and Charter, no direct customer accounted for 10 % or more of the Company’s total net sales during the years ended December 31, 2025, 2024 or 2023 . Accounts receivable from Comcast and TD Synnex Corporation (TD Synnex) represented approximately 42 % and 11 %, respectively, of accounts receivable as of December 31, 2025 , and 25 % and 16 %, respectively, as of December 31, 2024. Other than Comcast and TD Synnex, no direct customer accounted for 10 % or more of the Company’s accounts receivable as of December 31, 2025 or 2024. Comcast and Charter are customers of the Aurora and RUCKUS segments, and TD Synnex is a customer of the RUCKUS segment.
98
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
The Company relies on sole suppliers or a limited group of suppliers for certain key components, subassemblies and modules and a limited group of contract manufacturers to manufacture a significant portion of its products. Any disruption or termination of these arrangements could have a material adverse impact on the Company’s results of operations.
Related Party Transactions
For a discussion of the Convertible Preferred Stock issued to Carlyle to finance the ARRIS acquisition, see Note 14 in these consolidated financial statements. Other than transactions related to the Convertible Preferred Stock and the Company’s continuing involvement with Vantiva discussed in Note 4, there were no material related party transactions for the years ended December 31, 2025, 2024 or 2023.
Geographic Information
Sales to customers located outside of the U.S. comprised 28.5 % , 33.3 % and 31.0 % of total net sales during the years ended December 31, 2025, 2024 and 2023 , respectively. Sales by geographic region, based on the destination of product shipments or service provided, were as follows:
Year Ended December 31, 2025
RUCKUS (1)
Aurora
Total
Geographic Region:
United States
$
418.5
$
962.2
$
1,380.7
Europe, Middle East and Africa
144.6
81.0
225.6
Asia Pacific
99.0
52.9
151.9
Caribbean and Latin America
23.6
65.0
88.6
Canada
13.2
71.6
84.8
Consolidated net sales
$
698.9
$
1,232.7
$
1,931.6
(1) Includes activity of the OneCell business for periods prior to its disposition.
Year Ended December 31, 2024
RUCKUS (1)
Aurora
Corporate
and other (2)
Total
Geographic Region:
United States
$
327.4
$
595.1
$
—
$
922.5
Europe, Middle East and Africa
107.1
53.2
0.5
160.8
Asia Pacific
79.7
42.2
—
121.9
Caribbean and Latin America
23.1
75.0
—
98.1
Canada
9.0
70.3
—
79.3
Consolidated net sales
$
546.3
$
835.8
$
0.5
$
1,382.6
(1) Includes activity of the OneCell business for periods prior to its disposition.
(2) The corporate and other category above includes the activity from a business line within the CCS segment that was not divested with the sale of the CCS segment.
Long-lived assets, excluding intangible assets, consist substantially of property, plant and equipment and right of use assets. The Company’s long-lived assets, excluding intangible assets, located in the U.S., EMEA, APAC and CALA regions represented the following percentages of such long-lived assets: 80 %, 2 %, 10 % and 8 %, respectively, as of December 31, 2025 and 71 %, 6 %, 17 % and 6 %, respectively, as of December 31, 2024 .
99
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
18. QUARTERLY FINANCIAL DATA (UNAUDITED)
The unaudited interim financial information below has been recast to reflect the discontinuation of the CCS segment, OWN segment, DAS business unit and Home business. For further information on discontinued operations, see Note 4 in these consolidated financial statements.
First
Quarter
2025
Second
Quarter
2025
Third
Quarter
2025
Fourth
Quarter
2025
Net sales
$
388.1
$
512.7
$
516.3
$
514.5
Gross profit
197.6
279.6
244.4
234.3
Operating income (loss)
( 16.3
)
48.1
18.7
( 2.9
)
Income (loss) from continuing operations
341.1
32.0
1.5
( 50.3
)
Net income
784.0
31.8
108.4
1,359.5
Net income attributable to common stockholders
767.1
14.7
91.1
1,341.9
Basic earnings (loss) from continuing operations per share
$
1.50
$
0.07
$
( 0.07
)
$
( 0.31
)
Diluted earnings (loss) from continuing operations per share
$
1.25
$
0.07
$
( 0.07
)
$
( 0.31
)
First
Quarter
2024
Second
Quarter
2024
Third
Quarter
2024
Fourth
Quarter
2024
Net sales
$
296.5
$
325.2
$
345.7
$
415.2
Gross profit
118.9
141.2
168.5
176.5
Operating loss
( 128.0
)
( 57.1
)
( 59.0
)
( 47.6
)
Loss from continuing operations
( 63.7
)
( 74.2
)
( 47.1
)
( 21.0
)
Net income (loss)
( 333.7
)
44.4
( 33.0
)
6.8
Net income (loss) attributable to common stockholders
( 349.7
)
28.2
( 49.4
)
( 9.8
)
Basic loss from continuing operations per share
$
( 0.38
)
$
( 0.42
)
$
( 0.29
)
$
( 0.17
)
Diluted loss from continuing operations per share
$
( 0.38
)
$
( 0.42
)
$
( 0.29
)
$
( 0.17
)
19. SUBSEQUENT EVENTS
On January 9, 2026, the Company completed the previously announced sale of its CCS segment to Amphenol pursuant to the Purchase Agreement, dated as of August 3, 2025, in which Amphenol acquired the CCS segment on a cash-free, debt-free basis, in exchange for approximately $ 10.5 billion in cash, subject to certain adjustments.
In connection with the transaction, on the closing date, the Company repaid in full all outstanding indebtedness using a portion of the proceeds from the transaction and terminated all outstanding commitments under each of its Revolving Credit Agreement dated as of April 4, 2019, which provided for the Revolving Credit Facility in an aggregate principal amount of up to $ 750.0 million, and Term Loan Credit Agreement dated as of December 17, 2024, which provided for the 2029 Term Loan in an aggregate outstanding principal amount of $ 3,150 million.
In connection with the transaction, on the closing date, the Company satisfied and discharged the indentures governing the (1) $ 1,000.0 million in outstanding aggregate principal amount of the 2031 Secured Notes, (2) $ 951.0 million in outstanding aggregate principal amount of the 2029 Secured Notes, (3) $ 641.6 million in outstanding aggregate principal amount of the 2028 Notes, (4) $ 866.9 million in outstanding aggregate principal amount of the 8.25 % 2027 Notes and (5) $ 750.0 million in outstanding aggregate principal amount of the 5.00 % 2027 Notes (Notes). In connection therewith, on the closing date, notices of full redemption were issued to holders of all of the outstanding Notes, calling all outstanding Notes for redemption on January 26, 2026 using a portion of the proceeds from the transaction, and all outstanding Notes were redeemed on that date.
100
Vistance Networks, Inc.
Notes to Consolidated Financial Statements-(Continued)
(In millions, unless otherwise noted)
In connection with the transaction, on the closing date, 100 % of the Convertible Preferred Stock was redeemed by the Company for cash in accordance with the terms of the Certificate of Designations. Simultaneously with the consummation of the redemption, the Investment Agreement, dated as of November 8, 2018, by and among the Company and Carlyle pursuant to which such Convertible Preferred Stock was initially purchased, and all rights and obligations of the parties under the Investment Agreement, were terminated.
On January 13, 2026, the Company filed with the Secretary of State of the State of Delaware a Second Amended and Restated Certificate of Incorporation to change the Company’s corporate name from CommScope Holding Company, Inc. to Vistance Networks, Inc., effective January 14, 2026. The Company’s common stock will continue to trade on the NASDAQ Stock Market, but effective as of January 14, 2026, it is trading under the ticker symbol “VISN”.
101
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUN TANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.