Amphenol Corporation (APH) Earnings Call Transcript & Summary

Hello, and welcome to the Second Quarter 2026 Earnings Conference Call for Amphenol Corporation. [Operator Instructions] At the request of the company, today's conference is being recorded. If anyone has any objections, you may disconnect at this time. I would now like to introduce today's conference host, Mr. Craig Lampo. Sir, you may begin.

Great. Thank you so much. Good afternoon, everyone. This is Craig Lampo, Amphenol's CFO, and I'm here together with Adam Norwitt, our CEO. We would like to welcome you to our second quarter 2026 conference call. Our second quarter '26 results were released this morning. I will provide some financial commentary, and then Adam will give an overview of the business and current market trends, and then we'll take your questions. As a reminder, during the call, we may refer to certain non-GAAP financial measures and make certain forward-looking statements, so please refer to the relevant disclosures in our press release for further information. The company closed the second quarter of 2026 with record sales of $8.8 billion and GAAP and diluted EPS of $1.37 and $1.35, respectively. Second quarter sales were up 55% in U.S. dollars, 54% local currencies and 30% organically compared to the second quarter of 2025. Sequentially, sales were up 15% in U.S. dollars and in local currencies and up 13% organically. Adam will comment further on trends by market in a few minutes. Orders in the quarter were a record $10.732 billion, up a strong 94% compared to the second quarter of 2025 and up 14% sequentially, resulting in another very strong book-to-bill ratio of 1.23:1. This impressive book-to-bill was driven by robust bookings in all of our end markets, with every end market having a positive book-to-bill this quarter. GAAP operating income was $2.6 billion in the quarter, and GAAP operating margin was 29.5%. GAAP operating income included $24 million of noncash amortization of acquired backlog related to the CommScope acquisition. Operating income also included an $80 million or $0.04 per share net benefit related to the recovery of [ IEEPA ] tariffs. Excluding the acquisition-related costs, but including the tariff recovery benefit, adjusted operating income and adjusted operating margin were $2.6 billion and 29.8%, respectively. On an adjusted basis, operating margin increased a strong 420 basis points from the prior year quarter and 250 basis points sequentially. The year-over-year increase in adjusted operating margin was primarily driven by robust operating leverage on significantly higher sales volumes and, to a lesser extent, the tariff recovery benefit, which is more than -- which more than offset the margin dilutive impact of recent acquisitions. On a sequential basis, the increase in adjusted operating margin reflected the strong conversion on the higher sales levels as well as progress on profitability improvement actions at recent acquisitions, including, in particular, CommScope and, to a lesser extent, the tariff recovery benefit. I'm very proud of the company's operating margin performance in the second quarter, which reflects continued strong execution by our team. Bringing down second quarter results by segment compared to the second quarter of 2025. Sales in the Communications Solutions segment were $5.4 billion and increased by 85% in U.S. dollars and 42% organically. Segment operating margin was 33.6%. Sales in the Harsh Environment Solutions segment were $1.9 billion and increased by 28% in U.S. dollars and 22% organically as segment operating margin was 30.1%. Sales in Interconnect and Sensor Systems segment were $1.5 billion and increased by 17% in U.S. dollars and 13% organically, and segment operating margin was 21%. The company's GAAP effective tax rate for the second quarter was 25.3%, and the adjusted effective tax rate was 27%, which compared to 18.3% and 24.5% in the second quarter of 2025, respectively. As is our typical practice, our adjusted tax rate excludes the tax effect of acquisition-related costs and the excess tax benefit from stock option compensation as well as other discrete tax items. GAAP diluted EPS was $1.37 in the second quarter, up 59% compared to the prior year period. On an adjusted basis, diluted EPS was a record $1.35 and increased by 67% compared to $0.81 in the second quarter of 2025. This was an outstanding result. Operating cash flow in the second quarter was $1.6 billion or 88% of net income, and free cash flow was $1.2 billion or 68% of net income, an excellent result considering the growth we have experienced. From a working capital standpoint, inventory days, days sales outstanding and payable days were all within our normal ranges. During the quarter, the company repurchased 1.5 million shares of common stock at an average price of $141. When combined with our normal quarterly dividend, total capital returned to shareholders in the second quarter of 2026 was approximately $515 million. Total debt at June 30 was $18.8 billion, and net debt was $13.4 billion. Total liquidity at the end of the second quarter was $8.4 billion, which included cash and short-term investments on hand of $5.4 billion, plus availability under our existing credit facilities. Second quarter 2026 EBITDA was $3 billion, and our net leverage ratio was 1.3x at the end of the quarter, and we are very pleased with the company's financial position. I will now turn the call over to Adam, who will provide some commentary on current market trends.

Well, thank you very much, Craig. And first, I hope that all of you on the call today, together with your family, friends and colleagues, are enjoying a wonderful summer so far. As Craig mentioned, I'm going to highlight some of our achievements here in the second quarter. I'll talk about our trends in our served markets, make some comments on our outlook for the third quarter and then, of course, we'll have some time for questions at the end. With respect to the second quarter, I'm just really proud of the Amphenol organization, who drove excellent performance once again here in the second quarter of 2026. Our results were stronger than expected, exceeding the high end of guidance in sales and adjusted diluted earnings per share. As Craig mentioned, our sales grew from prior year by a very strong 55% in U.S. dollars and 54% in local currencies, reaching a new record for the company of $8.8 billion. On an organic basis, our sales also increased by a strong 30%, with all but one of our end markets experiencing robust organic growth. The company booked a record $10.7 billion in orders in the second quarter, representing a book-to-bill of 1.23:1. Orders grew by a very strong 94% from prior year and were up 14% sequentially. And with the significant acquisition of CommScope, I'd also just point out that our orders also grew organically by 63% from prior year. We're also very pleased to have delivered record adjusted operating margins of 29.8% in the quarter, which was an increase of 420 basis points from prior year and 250 basis points sequentially. Excluding the benefit of net tariff refunds, our operating margins still reached nearly 29%. This strong profitability is a direct result of the outstanding execution of the Amphenol team around the world. All of them continue to manage well in a challenging environment. Adjusted diluted EPS grew 67% from prior year, reaching a new record of $1.35. And then finally, the company generated strong operating and free cash flow of $1.6 billion and $1.2 billion, respectively, both clear reflections of the quality of the company's earnings. I just can't overstate my pride in the Amphenol team. Our results this quarter once again reaffirmed the value of the drive, discipline and agility of our entrepreneurial organization as we continue to perform well amidst a very dynamic environment. We're very excited that we completed 2 acquisitions during the second quarter, El.Com and Wilder Technologies. El.Com is based in Leno, Italy and has annual sales of approximately $150 million. It's a leading manufacturer of complex interconnect solutions and high-voltage cable assemblies for the industrial, defense and commercial aerospace market. And Wilder Technologies is based in Washington State here in the U.S. and has relatively modest annual sales of approximately $15 million, but Wilder is a key supplier to Amphenol for high-performance test and measurement solutions for our high-speed interconnect applications for the IT datacom market and really helps us to strengthen our extraordinary capabilities in high-speed products. I'd also like to take this opportunity to congratulate the CommScope team on their outstanding performance so far. I'm really proud of what this team has achieved after now being part of the Amphenol family for 2 full quarters. Indeed, we now expect CommScope to deliver $4.6 billion of sales and $0.30 of accretion for the full year 2026. And this represents a significant upgrade from our previous expectations of $4.1 billion and $0.15. I remain very confident that our acquisition program will continue to create great value for Amphenol. Our ability to identify and execute upon acquisitions and successfully bring these new companies into our family remains a core competitive advantage for the company. Now turning to our served markets. I would just comment that we're very proud of Amphenol's broad and balanced end market exposure. Our diversification continues to create great value for the company, enabling us to participate across all areas of the global electronics industry, each of which creates significant future opportunities for expansion. We remain committed to continuing to broaden our portfolio across markets, geographies, customers, applications and products as we build on the company's momentum to further strengthen the company's position long into the future. Turning first to the defense market. This market represented 8% of our sales in the quarter. Sales grew from prior year by a robust 37% in U.S. dollars and 24% organically. And this was really driven by broad-based growth across nearly all areas of the defense market. Sequentially, our sales increased by 7%, which was in line with our expectations coming into the quarter. As we look into the third quarter, we expect sales to increase in the low double-digit range from these second quarter levels. We remain very encouraged by the company's leading position in the defense interconnect market, where we continue to offer the industry's widest range of high-technology interconnect solutions. Amidst the current dynamic geopolitical environment, there's no doubt that countries around the world are increasing their investments into both current and next-generation defense technologies. With our expanded product offerings as well as the significant capacity expansions that we continue to make, we're positioned better than ever to capitalize on these long-term demand trends. The commercial air market represented 4% of our sales in the quarter. Sales increased by 22% in U.S. dollars and 21% organically from prior year, a very strong performance. So we benefited from increased aircraft production volumes, coupled with our company's continued progress in expanding content on next-generation commercial aircraft. Sequentially, our sales grew by 6% from the first quarter, which was actually significantly stronger than our expectations coming into the quarter for a slight moderation. Looking towards the third quarter, we expect sales to be up modestly from these second quarter levels. I'm truly proud of our team working in the commercial air market. With the ongoing growth in demand for next-generation aircraft, our efforts to expand our product offering, both organically as well as through our acquisition program, continued to pay real dividends. We look forward to further capitalizing on our expanded range of product solutions for the commercial air market long into the future. The industrial market represented 20% of our sales in the quarter. Sales in this market grew 56% in U.S. dollars and 18% organically as we saw continued strong demand across the diversified industrial market and as we benefited once again from the addition of CommScope's building connectivity business. On an organic basis, virtually all of our industrial segments grew in the quarter. We also saw double-digit growth in all 3 geographies. On a sequential basis, sales grew by a much better-than-expected 13% from the first quarter. As we look into the third quarter, we do expect sales to be roughly at the same elevated levels as we saw here in the second quarter. We're very excited by the company's renewed strength across the many diversified segments of this important industrial market. With the acquisition of El.Com, we have further added to our value-add interconnect capabilities for European industrial customers. And over the long term, I'm confident in our strategy to expand our high-technology interconnect antenna and sensor offerings, both organically and through complementary acquisitions. This strategy has enabled the company to capitalize on the [ May ] electronic revolutions that continue to occur across the diversified industrial market, thereby creating further opportunities for our outstanding team. The automotive market represented 10% of our sales in the quarter. Sales in automotive grew 9% in U.S. dollars and 6% organically as we experienced growth in all regions and as we saw a pickup in demand for vehicles with electrified drivetrains. Sequentially, our sales grew by 9% from the first quarter, which was much better than our expectations coming into Q2. For the third quarter, we expect sales to remain at these second quarter levels, and we would typically see some summer seasonality. I remain very proud of our team working in the global automotive market. And while there are clearly areas of demand uncertainty around this industry, our team continues to remain laser-focused on driving new design wins with customers who are increasing the content of new electronics being integrated into their next-generation vehicles. We look forward to benefiting from our strengthened position in the automotive market for many years to come. The communications networks market represented 11% of our sales in the quarter. Sales grew from prior year by 55% in U.S. dollars, driven primarily by the addition of CommScope. On an organic basis, sales actually moderated by 6% from prior year due to demand moderations from both communications network operators and wireless equipment manufacturers. I would just note that CommScope actually grew on a year-over-year basis in communications networks from prior year. Sequentially, our sales in the second quarter grew by 5% from the first quarter, which was a bit better than our expectations coming into the quarter. Looking to the third quarter, we do anticipate that sales will decline in the mid-teens from these second quarter levels. With our expanded range of technology offerings following the acquisitions of both CommScope and Andrew, we are better positioned than ever with both service provider and OEM customers across the communications networks market. Our deep and broad range of products, coupled with our global manufacturing footprint, have positioned us well to support communications networks customers around the world. As the accelerating volume of data traffic drives long-term demand for expanded and upgraded networks, we look forward to enabling these systems for many years to come. The mobile devices market represented 4% of our sales in the quarter. And our sales grew by 17% in U.S. dollars and a strong 14% organically, with growth really in smartphones, laptops as well as wearable devices. Sequentially, our sales increased by 19%, which was much better than our expectations coming into the quarter. We had actually expected quarters to -- sales to decline in this quarter on a sequential basis. As we look into the third quarter, we anticipate sales to increase roughly in the 20% range compared to the second quarter as we participate in the beginnings of a variety of new program launches for our customers. I'm very proud of our team working in the always dynamic mobile devices market, as their agility and reactivity have once again enabled us to significantly outperform our expectations in the quarter. I'm confident that with our leading array of antennas, interconnect products as well as advanced mechanisms, including hinges that are designed in across a broad range of next-generation mobile devices, we're positioned well for the long term. The IT datacom market represented 43% of our sales in the quarter, and we once again had a very strong quarter in IT datacom, growing 89% in U.S. dollars and 63% organically. This was driven by continued acceleration in demand for our products used in artificial intelligence applications, together with robust growth in our base IT datacom business. On a sequential basis, sales increased by 22% from the first quarter, which was substantially better than our expectation. Virtually all of this growth was driven by sales of AI-related products. Looking into the third quarter, we expect a further sequential sales increase in the mid-teens from these second quarter levels as investments in AI data centers continue to accelerate and as enterprise and cloud customers expand their demand for traditional IT datacom equipment. We're more encouraged than ever by the company's position in the global IT datacom market. Our team has done an outstanding job of both securing future business on next-generation IT systems with a broad array of customers, but also on executing on these exciting new programs. In addition, I would just comment that the team at CommScope continues to make great progress in further penetrating the IT datacom market with their advanced optical interconnect solutions. And we now expect that the IT datacom market will represent just a bit less than half of CommScope's total sales for the full year, and that compares to about 1/3 of their sales in 2025. The revolution in AI has no doubt created a unique opportunity for Amphenol given our leading high-speed fiber optic and power interconnect solutions. All of these high-technology products are critical components in our customers' current and next-generation systems. This creates a continued long-term growth opportunity for the company. Now turning to our outlook, and of course, assuming current market conditions as well as constant currency exchange rates. For the third quarter, we now expect sales in the range of $9.3 billion to $9.4 billion and adjusted diluted EPS in the range of $1.40 to $1.42. This would represent sales growth of 50% to 52% and adjusted diluted EPS growth of 51% to 53% compared to the third quarter of prior year. I would just note that our guidance does not reflect any additional net tariff recoveries, which we expect to be immaterial going forward. I remain confident in the ability of our outstanding management team to adapt to the many opportunities and challenges in the current environment and to continue to expand Amphenol's market position while driving sustainable and strong profitability over the long term. Finally, I'd like to take this opportunity to thank our entire global team for what is no doubt, just outstanding efforts here in the second quarter. And with that, operator, we'd be very happy to take any questions.

[Operator Instructions] We have a question from Steve Volkmann from Jefferies.

Maybe I'll just start with CommScope. Obviously, some nice upside there. I think the guidance raise you said was all basically IT datacom. I'm just wondering if we can sort of drill into that a little bit more, what types of projects are really they're participating in? Is it more optical? Is there anything happening in building or broadband to call out?

Yes. Thanks very much, Steve. I mean, I didn't say necessarily that all of the increase is IT datacom. But I can say that IT datacom is certainly driving the strength for them. I mean, they're growing really across the board in their business. So we're seeing growth, as I mentioned. Also in communications networks, we are seeing as well, meaningful growth with them in their industrial market or what we refer to as the building connectivity market. But there's no doubt that they're making great progress in the IT datacom market. And in particular, making great progress in applications related to AI. I mean, in fact, if you look at their IT datacom business on a year-over-year basis, it's essentially doubled on a year-over-year basis, which is really, really impressive. And all of what they do in IT datacom is, in fact, optics, advanced complex optical interconnect solutions for customers, doing a broad array of things. And we're seeing great growth there and great progress with what they do. And I will just say as well that now that CommScope is part of the Amphenol organization, they are already taking good advantage of being part of Amphenol and the relationships that we have, which are obviously very long-standing relationships up and down through the stack of the companies that are both building out data centers, equipping those data centers with next-generation systems, architecting the chips and doing everything in between. And so there's no question that being part of Amphenol has been a great thing for CommScope as it relates to their position in IT datacom specifically.

We have a question from Joseph Cardoso from JPMorgan.

Maybe just another follow-up on the CommScope, the raise in guidance here. You're raising the revenue from $4.1 billion to $4.6 billion, but the EPS outlook is more than doubling. So maybe can you just walk through what you're seeing in terms of the margin profile of the CommScope acquisition, actually contextualizing where the upside is coming from and essentially why you're seeing the better flow-through there? Is it all operating leverage? Or is the gross margin profile of the business tracking better than what you had expected when -- at least a couple of quarters when you had completed the acquisition?

Yes. Thanks so much. Yes. No, we're really happy with the kind of profitability progress with the CommScope acquisition and the folks. I mean, the team has really done a great job of kind of embracing kind of the Amphenol culture, working with some of the other businesses. And I wouldn't say it's just gross margin. I would say -- I mean, listen, they're certainly growing at a pretty good pace right now. And they're -- so I think that they achieved just a bit over $1.2 billion here in the second quarter in sales. They've done a really good job of leveraging that growth. I wouldn't say just on gross margin, but also kind of also in the SG&A and operational expenses. And I think they really have just increased their profitability. I mean, they're essentially in the second quarter, operating over 20%, including the amortization that we have kind of embedded in those numbers now from the acquisition. So they've done a great job in the factory with their vendors, with controlling cost on SG&A kind of across the board. I wouldn't say it really has come from pricing to any extent. It really has more come from really just operational execution, both in the factory as well in the operating expenses.

And look, I would just add one thing to that, which is we knew when we met these folks early on that this was an amazing team of people. I mean, from the leadership all the way down through the organization. I mean, I still remember our very first kind of management meeting, and there were some 30 people that we got to interact with at the time. And each of them just passionate. And in many ways, they were a team of people whose capabilities and potential was maybe not necessarily being tapped into given just the overall environment that surrounded CommScope in the past. And [ to not follow ] the CommScope. It's a great company, but we don't need to talk about the different environment that they came into as soon as they came to be part of Amphenol. And that's a team of people who are fighters. I mean, they have not been without challenges. They see every day in the market, there's lots of challenges that they have to manage through. At the same time, the aggressiveness with which they pursue opportunities, the aggressiveness with which they pursue being part of Amphenol, actually the collaboration that they've embraced being part of a broader organization of people who do interconnect for a living. I mean, that's what we've been doing for the entire history of this company, 94 years, we're an interconnect company. and being part of that and being a real leading light in that has, I think, been an energizing thing for the CommScope organization, and that is clearly manifest in their numbers that we see today. And we think that we're just getting started with CommScope.

We have a question from Amit Daryanani from Evercore.

Congrats on some impressive numbers here. Adam, I think investors often sort of frame the AI connectivity opportunity as a copper versus fiber debate or a copper or fiber debate sometimes. From your side, is that sort of the right way to think about the market? Is that what customers are telling you? I'd love to just kind of understand what are you seeing from a growth basis across both copper and fiber. And any qualitative or quantitative framework you could provide in terms of how big the fiber business is within the $10.5 billion, $11 billion AI revenue run rate you have right now would be really helpful.

Well, thanks very much, Amit. Look, I mean, we've had this discussion in the past. And what I can tell you is this. As we talk to our customers and we talk to them about what's going on today, what they expect next year, what they expect the years thereafter, the one consistent thing we hear from our customers is they need more of everything. They need more of everything, more high-speed copper, more fiber optic solutions and more power solutions. And there's no doubt about it that we see that reflected actually in the growth rates that we're experiencing today. I mean if you look at our IT datacom, overall growth organically growing 63% in the quarter, the AI is growing faster than that. And I mentioned that CommScope nearly doubled their [ IAI ] business on a year-over-year basis. And we expect the IT datacom market to be just under half of CommScope's total. And everything that CommScope does in IT datacom is really around AI and around optics. And so you can put a little framework around their business. We also have, as everybody knows, already a fiber optics business of significance before, both the passive optical interconnect business as well as an active optics business. And so our -- without putting to the decimal point numbers behind it, I can tell you that today, we have a very strong high-speed copper business. We have a very strong and significantly scaled, one of the world leaders in optics in AI. And we also have a leadership position in power interconnect for AI as well. And so each of those are really significant pieces of that entire puzzle.

We have a question from Luke Junk from Baird.

That's actually a great segue. I was hoping you could spend a little more time talking about your power portfolio. Clearly, that's an area of increased innovation within IT datacom. You mentioned that you're a global leader, maybe more context there? And just how you see that innovation opportunity set, both traditionally in the white space, on the rack, and what seems like some real opportunities looking out into the future in the [ great ] space in the medium term as well?

Thanks very much, Luke. I mean, look, when I talk about power interconnect, this is part of the legacy of Amphenol. We've been involved in making our interconnect products for the vast majority of the history of this company. And it goes back to our legacy in the defense industry and industrial products, where we developed leading interconnect technologies, leading contact technologies to drive safe and efficient transfer of power in all environments. We've expanded that over the years to board-level power, to bus bars, to complex power cable assemblies and the like that go in a variety of places, all the way from deep in the rack, connecting directly to the chip all the way to where it comes into the data center from the switchgear and beyond. Today, we see a lot of advances in power technology, movements to higher voltages, implementation of things like liquid cooling, embedding of sensors into connectors so that you can create smarter power connectors and the like. I mean, there's just a lot going on there. And at the end of the day, I like to think in very simplistic terms, in part because I studied international politics, not engineering as an undergrad. But what AI is, is conversion of electrons into tokens. And everywhere along that phase, if you can make the conversion of electrons into tokens more efficient, then you're creating value for your customers. You're creating value for your direct customers, you're creating value for your end customers. Well, on the electron side of that, our power interconnect having some of the safest, most efficient technologies is creating true value by allowing our customers to use a few less electrons as they generate a few more tokens. And when you get then to the other side of high speed, well, how do you get those tokens out as quickly as possible, create the models? You're doing that with both high speeds, copper, as well as optics interconnect, and we do that as well. So everywhere along that equation of that electron token conversion, Amphenol is a partner for our customers.

We have a question from William Stein from Truist Securities.

Great. Congrats on another fantastic quarter. Adam, there's been a lot of discussion among some of the key infrastructure suppliers to the AI market and debates about their approach to backplane design. And I believe Amphenol is a very heavily evolved in one in particular. I'm sure you're in many or maybe all of them, but there is one where there is a [ cablized ] sort of spine backplane and a discussion that seems to have gone back and forth as to whether this may convert to a printed circuit board. And I think there had been an assumption that this would be a potential challenge to the growth in your business. But I wondered if perhaps the connectors used in such evolved architectures might be even more complex and more content and margin-rich. So I'm wondering if you can help sort of frame this for us. If we see in the supply chain that this conversion to PCB is happening, should we think this is a challenge or a benefit or neither for your business?

Yes. Well, thank you very much, Will, and I appreciate your comments and the question. I mean, look, at the end of the day, there's lots of nuances of designs that are happening across the board. But the one constant is that there's more content. And so for us, our goal here is not to put all of our eggs in one basket of one type of architecture or another. It's to have the breadth of technologies available for our customers, such that we can handle and help them handle the multitude of increasing content. Whether one or another decides to go to a backplane versus a cable versus a printed circuit board, this is really not the core question. The core question is, is there more overall content of interconnect? And with the breadth of our position, by the way, a company who makes cable, who makes printed circuit boards, who makes printed circuit board assemblies, cable assemblies, I mean, we're just trying to enable our customers in which every way they go. And what our customers are trying to do is really, really hard things. And so us being at the table with them to do those really, really hard things with the leading engineers in the industry who understand all these moving parts, I mean, that's where we create value. And whichever one individual program or a web service provider makes some decision or another, they're all moving in the direction of more content, not less, and that creates a great opportunity for Amphenol.

We have a question from Joe Giordano with TD Cowen.

Adam, there's a lot of talk about like -- in the future, what's the right type of models that we need, whether it's frontier models versus open source models and where they're housed, whether it's here versus China. I mean, we talked a lot about the breadth of your portfolio and you can kind of play everywhere. But what are the implications of how that mix ultimately plays out globally?

Yes. Look, I mean, we work with customers around the world. We work with customers who make GPU architectures, who make ASIC architectures, who make XPU architectures, you name it. Because no matter what architecture you're choosing, at the end of the day, to create an AI that really creates value for the end customer, you have to compare everything to everything else. And we see that what that means is you need interconnect to do that. And so whether it's on training or actually on inference -- and to be honest, inference seems to grow at an even faster pace, also requires an intensity of interconnect products that really is unprecedented, we continue to enable customers in all ways. So we are not like model-dependent. We are not frontier training versus inference-dependent. We're not geographically-dependent. I guess the only thing we are dependent on is that people continue to invest in this thing and it continues to have increases in content, we see that for a long time to go.

We have a question from Asiya Merchant with Citigroup.

Great set of results here. It's very impressive, the CCS margins that you're able to drive here. I think there were just some concerns about fiber supply and if that could potentially negatively impact the CommScope acquisition, doesn't seem to be the case. So [ Andrew ] and Craig, could you just talk a little bit about how you feel about the supply coming here for, just given the growth that investors are expecting broadly, just for the optical side of the portfolio as well?