Vecima Networks Inc.

Hello, this is the Chorus Call Conference Operator. Welcome to Vesima Network Second Quarter Fiscal 2025 Results Conference Call and Webcast. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. Analysts and institutional investors who wish to join the question queue Simply press star and one on your touchtone phone. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up the handset before pressing any keys. Should you need assistance during the conference call, you may signal the operator by pressing star and zero. Presenting today on behalf of Vesima Networks are Sumit Kumar, President and CEO, and Judd Schmid. Chief Financial Officer. Today's call will begin with executive commentary on Vesima's financial and operational performance for the second quarter fiscal 2025 results. Lastly, the call will finish with a question and answer period for analysts and institutional investors. The press release announcing the company's second quarter fiscal 2025 results, as well as detailed supplemental investor information, are posted on Vesima's website at www.vesima.com under the investor relations heading. The highlights provided in this call should be understood in conjunction with the company's unaudited interim condensed consolidated financial statements and accompanying notes for the three and six months ended December 31st, 2024 and 2023. Certain statements in this conference call and webcast may constitute forward-looking statements within the meaning of applicable securities laws from which VESMA's actual results could differ. Consequently, attendees should not place undue reliance on such forward-looking statements. All statements other than statements of historical fact are forward-looking statements. These statements include but are not limited to statements regarding management's intentions, belief, or current expectations with respect to market and general economic conditions, future sales and revenue expectations, future costs, and operating performance. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. and or are beyond our control. Bessema disclaims any intention or obligation to update or revise any forward-looking statements as a result of new information, future events, or otherwise, except as required by law. Please review the cautionary language in the company's second quarter earnings report and press release for fiscal 2025 as well as its annual information form dated September 19, 2024, regarding the various factors, assumptions, and risks that could cause actual results to differ. These documents are available on VESMA's website at www.vesma.com under the investor relations heading and on CDAR at www.cdarplus.ca. At this time, I would like to turn the conference over to Mr. Kumar to proceed with his remarks. Please go ahead.

Thank you. Good morning and welcome, everyone. Thank you for joining us. Our second quarter was a complex one with transitory impacts affecting our financial results. At the same time, Q2 brought important strategic achievements that continue to pave the way for Bessemer's future growth and success. I'm going to start today with an overview of the key events of the quarter. I'll also take a few moments to talk about the prospect of U.S. tariffs as it relates to Vesma. Doug will follow with a more detailed Q2 financial review, and then I'll return to talk about our outlook going forward. As we disclosed both in our preliminary earnings release last week and in today's release, our business faced a number of overlapping headwinds in Q2 that impacted results. Consolidated sales, while up 15% year over year, came in below Q1 levels and did not meet our expectations. Adjusted EBITDA of 1.1 million and adjusted loss per share of 25 cents also represent a disappointing result relative to our initial objectives coming into the quarter. Though I do want to emphasize that both adjusted EBITDA and net loss as reported were impacted by 4.3 million in non-cash foreign exchange losses in the quarter. Another key factor affecting our results was customer timing adjustments as it relates to network upgrades. As you know, Bessema is supporting a number of major DAA programs with customers in fiscal 2025. Transitions of this scale require system level field qualifications, which can be challenging, particularly for tier one operators with very large networks and typically a mix of older and newer systems in place. While we're extremely proud of how well Vestimus technology has been performing through the qualification phases, these are once again very large and major projects, touching a complex environment of networks and technologies. So while Vestimus products have performed exceptionally well as designed, throughout customer testing, customer certification across the entire ecosystem of partner solutions has been slower than initially anticipated. It all takes time. And for Bessema, the net effect was a slowing of our Entra sales pace in Q2. Where we did see a major uptick in Entra sales was with our new EN9000 platform. We've now shipped close to 15,000 of those nodes, with the majority delivered in the second quarter. EN9000 is a product that carries significant strategic importance, but it also carries a lower margin profile. It's a modular node platform device that's designed to be hardwired into place in the cable access network and populated with successive generations of software driven access modules that enable the operators to repeatedly tap into next generation performance and capacity. While it's a little piece of technology on a standalone basis, it delivers a lower relative margin profile. This balances out over time as higher margin software-centric modules are added to the platform. The increase in lower margin E&9,000 deliveries combined with project and order delays for some of our higher margin network upgrade products shifted the gross margin as a result of the product mix. And this was compounded by a year-over-year decrease in CDS sales, which is a higher margin segment for Vesma. As I mentioned earlier, our bottom line results were further affected by a negative foreign exchange impact related to movement in the value of the Canadian dollars. And we also implemented a workforce reduction in December, which resulted in recognition of some restructuring costs during the quarter. We undertook that initiative to better align our teams and our investments with our customers' needs and to enhance operating efficiency. I should note that headcount was ramped up quite significantly in recent years to support the network upgrade timing originally planned by customers. On an annualized basis, we expect to achieve related cash cost savings of about $17.5 million, and we'll start to see some of those savings benefiting our results in the second half. Between the cost restructuring and the wrap-up of EN 9000 deliveries, these are strategies that will strengthen our performance going forward. Turning now to some of our other strategic achievements for the quarter, and starting with our video and broadband solutions segment, In addition to the volume ramp with our EN9000 node, we increased deliveries of our EN8400 node during the quarter, both to our lead customer for that platform and to another customer as well. We call the EN8400 a forever node because it provides a clear pathway to 10G by supporting DAA today while also supporting future technologies like DOCSIS 4.0 and 10G Fiber as a home. Like the EN9000, the EN8400 positions customers from multiple generations of access solutions. On the VCMTS front, customer engagement continued to grow with lab trials now underway with four North American MSOs, including our lead tier one customer. We also secured new lab trial commitments for VCMTS with additional tier twos and threes worldwide. Several of those lab trials are expected to launch in upcoming quarters. We continue to anticipate that Entra VCMTS will be a significant driver of our future growth and success and continue to invest heavily in this product and project. And it's an important and significant new part of the cable access TAM for this month that isn't yet part of our revenues. And as software, it's also positioned to be highly accretive to our margins. As previously announced, we also completed our tuck-in acquisition of Falcon V in the second quarter. Vulkan brought us two important new software technologies, Principal Core, a platform orchestration technology, and TestSuite, an end-to-end test platform that lets operators significantly speed up and scale their DAA software upgrades, particularly in multi-vendor and multi-core environments. During the quarter, we saw strong interest in and contribution from these products as we secured licenses for the principal core with a lead tier one customer in North America and landed our first order for the Falcon test suite with a customer outside of North America. We also expect the Falcon solutions to be strong beachheads to key customers for BCMTS and remote PI sell-through opportunities. Turning to our CDS segment, the quarter brought continued momentum for our dynamic ad insertion technology. We positioned the solution with multiple additional customers during the quarter, building on our earlier deployments with the initial three customers. We also made continued progress with our Open CDN platform, deepening product readiness and features together with customer engagements. We see both dynamic ad insertion and Open CDN as significant potential growth drivers for the CDS segment going forward. As you know, in November, we also announced the exclusive global agreement with Digital Harmonic to market its keyframe media optimization product. That's a high-value solution that drives costs down while materially improving video quality and capacity for operators. So that relationship is off to a great start, and by the end of Q2, we had already secured our first lab order for that product. In our telematics segment, we achieved another strong quarter as we continue to attract new customers for our asset tracking services. As a whole, telematics is now monitoring over 100,000 assets, including 20,000 vehicles and 80,000 asset tags as part of a growing recurring revenue business that delivers an attractive gross and EBITDA margins to the company. So overall, while challenging on the financials for the period, some very good achievements for the business in Q2. Before I turn the call over to Judd, I want to talk about the recent prospect of U.S. tariffs on Canadian goods and how that might impact ESSIMA. So currently, about 90% of ESSIMA sales are to the U.S., but because of a significant proportion of our products are already manufactured in non-tariff jurisdictions, we estimate that only about half of our U.S. sales would be subject to the proposed tariffs. As a short-term mitigation effort, we've taken the precaution of accelerating shipments and warehousing of goods in the U.S. in advance of potential tariff implementation. But in planning longer-term strategies, I want to point out that our approach has always been to take the lowest cost approach to production of goods, whether that's in Canada, the U.S., or offshore or nearshore. We are both diversified and agile when it comes to manufacturing. That's core strength of Esmus. You know, we've demonstrated the ability to adjust quickly, whether via partners or directly. And in multiple recent instances, as a result of both our key M&A and new product introductions, we've successfully transitioned manufacturing across a number of jurisdictions, partners, and product lines. Just one example of that is the recent migration of some of our product manufacturing to the U.S. in anticipation of the BEAD program. I do want to note, however, that simply shifting production to the U.S. as a tariff response strategy could very well increase overall costs due to the higher labor and overhead cost potential in the U.S. If the tariffs do ultimately materialize, we'll assess the best and lowest cost manufacturing strategy and make appropriate adjustments. And if costs do increase as a result of tariffs or other inputs, we have worked to ensure our product prices keep pace. We have a long track record of partnering with customers to share the burden and recoup cost increases and to maintain sufficient margins. And as an example, during the pandemic, customers partnered to accept both short-term and sustaining price increases that resulted from the supply chain pressures during that time. One final note on this topic is that we do believe that our competitors are on equal footing in terms of their own offshore or nearshore manufacturing setups. So this is expected to be an industry-wide issue to manage. Overall, adapting to changing business conditions is one of ESMO's core strengths. And while no one looks forward to market disruptions, we have a proven and successful track record of managing well in times of change. At this point, I'll turn the call over to Judd to review our financial results. Judd?

Thanks, Sumit, and good morning. I'll be reviewing our second quarter fiscal 2025 financial performance in more detail. And for the purposes of this call, I'll assume everyone has seen our Q2 fiscal 2025 news release, MD&A, and financial statements posted on VESMA's website. As we indicated in our press release last week, and as Sumit has discussed today, Our second quarter was complex with financial results affected by various temporary impacts. Focusing first on revenue, we generated consolidated sales of $71.2 million, which were up 15% year over year, but 13% lower on a sequential quarterly basis. Our video and broadband solution segment contributed $59.3 million of these sales with revenue growing 21% year over year. Entra DAA sales were, again, the key driver for the segment. Supported by the volume rollouts of our new EN9000 gap node, our Q2 DAA sales grew 29% year-over-year to $56.2 million. However, Entra sales did not keep pace with Q1 fiscal 2025 results with revenue down 18%. This also contributed to the 19% sequential quarterly decrease in VBS segment sales. As anticipated, sales of our legacy commercial video products also declined during the quarter as customers continued to transition to next generation DAA driven commercial video solutions. Commercial video sales of $3 million were 44% lower year over year and 35% lower quarter over quarter. In our content delivery and storage segment, second quarter revenue of $10.2 million picked up the pace from Q1 growing 41% sequentially but decreased 9% year-over-year. As we have previously noted, quarterly variations are normal for this segment and relate to the timing of customer projects and orders. In our telematics segment, revenues of $1.7 million were on par with last quarter and approximately 7% higher year-over-year as we continue to make strides with our movable asset solution strategies. Gross profit dollars for the second quarter decreased $4.9 million year-over-year to $25.9 million with a gross margin percentage of 36.4% compared to 49.8% last year and 41.7% last quarter, mainly due to changes in our VBS product mix. As Sumit explained, the downward shift in gross margin reflects a higher volume of our new EN9000 platform which carries a lower margin profile. We expect to see a gradual recovery of our gross margin percentage in the future as our revenue mix changes. Shifting now to operating expenses, including share based comp and acquisition related expenses, but excluding the restructuring charges, Q2 operating expenses decreased to $26.5 million from $29.6 million last quarter, but increased slightly by $300,000 from last year. The notable changes year over year were as follows. R&D expenses increased slightly to $11.7 million from $11.6 million. Adjusting for deferrals, amortization of deferred development costs, investment tax credits, our actual cash R&D investment increased to $16.3 million from $15.2 million last year. but as a percentage of revenues decreased to 23% from 25% of revenues. Second quarter sales and marketing expenses decreased $400,000 to $7.3 million. This was primarily driven by a non-cash reversal of finished product allowances, partially offset by higher conference and travel and entertainment costs. As a percentage of revenue, our sales and marketing expenses decreased to 10%, from 12% year over year. Second quarter G&A expenses increased by $300,000 to $6.9 million. This reflects higher staffing cost and G&A costs related to the Falcon acquisition. As a percentage of sales, G&A expenses also decreased to 10% from 11%. In order to better align our workforce with our customers' needs, we undertook a workforce restructuring charge in December. As a result, we reduced our global workforce by approximately 12%. This action, along with some additional non-labor operating expense cost cuts, is expected to result in annualized cash savings of approximately $17.5 million. Additionally, as a result of this workforce reduction, we incurred $2.8 million in restructuring costs related to severance during the current quarter. Looking at our bottom line results, we reported a second quarter operating loss of $3.4 million compared to operating income of $4.7 million in Q2 of last year. While our consolidated revenues increased, the temporary decline in gross margin percentage together with the one-time restructuring charges accounted for the decrease in operating income. Now, regarding foreign exchange, we recorded a net foreign exchange loss of 4.3 million in the second quarter, which compares to a net foreign exchange gain of 1.8 million in the same period last year. Breaking this down further, we had $6 million in unrealized FX losses that were partially offset by $1.7 million in realized FX gains. This stems from the fact that we have a significant exposure of net U.S. dollar denominated liabilities in our Canadian books, such as an outstanding balance on our line of credit, trade payables, and intercompany payables. As a result of the weakening of the Canadian dollar against the U.S. dollar in the second quarter, the revaluation of these liabilities resulted in the non-cash unrealized FX loss. If the Canadian dollar strengthens against the U.S. dollar, these unrealized losses will reverse. Once settled and realized though, the transactions do not get revalued. So as a result of the product mix impact on gross margins, the restructuring charge and the FX loss, we reported a second quarter net loss of $7.9 million or 32 cent loss per share, which was down from net income of $3.6 million or 15 cents per share in the second quarter of fiscal 24. Similarly, Adjusted EBITDA was $1.1 million as compared to $12.5 million last year. Our adjusted EBITDA, to note, does not add back the FX losses of $4.3 million just discussed. Turning now to the balance sheet, we ended the second quarter with $2.4 million in cash as compared to $2.2 million at the end of last quarter. Working capital of $63.8 million decreased from $83.5 million at the end of last quarter, primarily reflecting lower quarter end receivables. Lastly, cash flow provided by operations increased to $15.2 million from $13.2 million used in operations during the same period last year. As a result of this increase in cash flow provided by operating activities, We were able to pay down our revolving line of credit by $3.8 million in the second quarter. Our quarter end draw on our line of credit was $32.1 million. Operating cash also provided the funding for our acquisition of Falcon V systems for a total cash of $3.9 million, which was net of the cash we acquired. On a final note, the board of directors approved a quarterly dividend of 5.5 cents per common share payable on March 24th, 2025 to shareholders of record as at February 28th, 2025. It is important to note that this dividend will be designated as an eligible dividend for Canadian income tax purposes. VESMA's board reviews the dividend policy each quarter based on the company's ongoing results of operations, financial condition, cash requirements, and other factors such as the current short-term uncertainties relating to customer project timing and potential trade actions. As you'll hear shortly from Sumit, our longer-term outlook remains very positive on both the top and bottom lines. And even after a challenging Q2, we are moving forward in a solid financial position. Back to Sumit.

Thank you, Judd. As we move forward, we recognize that demand volatility could continue into the second half, depending on customer project timing. As I mentioned earlier, it takes operators time to qualify very large and transformative system upgrades. On a positive note, once qualifications are in place, things typically move quickly, but the timing is hard to predict, even for customers themselves sometimes. As noted earlier, prospect of U.S. trade actions is also adding uncertainty to our outlook. While the combination of trade and customer timing uncertainties makes accurate forecasting difficult in the near and medium term, we remain very confident in investing with longer-term prospects, given our innovation, technology, design wins, and customer relationships, together with a definitive industry plan of record for network evolution tied to these products. The DAA and IPTV markets we're investing in are areas of significant growth globally. Bessema enjoys very strong global market share in both of these markets. By way of example, we have about a 40% global share in remote Pi devices and greater than 80% share for remote Mac Pi. On the fiber access side, we're number one in the world for remote optical line terminals. Add to this our deep and growing relationships with some of the world's largest and most sophisticated operators and broadcasters and our many different avenues of growth going forward and our position, again going forward, remains exceptionally strong. The only real uncertainty is in the timing. With that in mind, here are some general color points on the second half. In our BBS segment, we expect to see continued volume deployments of our EN9000, together with additional rollouts of our fiber access platforms in the coming quarters. We also expect to start layering in EXS1610 all-pond shelf deliveries in the second half. Our new Falcon solutions will also provide additional opportunities as the year progresses. Looking further ahead, our entry into the VCMTS market provides another significant growth driver for BESMA, and we can see contribution as early as year's end. As we discussed last quarter, we've tempered our expectation of what we'll see from the USB program for this year. In the interim, operators are continuing to access funding from the Rural Digital Opportunity Fund, which is providing support for our fiber access products. In our content delivery and storage segment, we anticipate a stronger second half, supported by existing and new customers' IPTV upgrades and expansions, as well as the continued rollout of our new dynamic ad insertion products. Added to this, we expect to realize opportunities from our new partnership with Digital Harmonic A new keyframe technology offers massive savings and capacity increases for operators, and it is poised for wide-scale adoption. Longer term, we continue to see robust future growth potential as IPTV and OTT streaming services markets continue to expand, and as open caching and dynamic advertising as growth engines we have developed continue to mature. Finally, in our telematics segment, expect continued incremental growth as demand for our newer removable asset tracking services grows and as we add additional subscriptions from the fleet tracking market. Bessemer's long-term future continues to look excellent, and in the near term, we're a proven company that has demonstrated our ability to successfully adapt to rapidly changing business conditions. Our goal is to continue creating strong value for our customers and our shareholders, and we intend to do just that. That concludes our formal comments for today. We now be happy to take questions. Operator?

We will now begin the question and answer session for analysts and institutional investors. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause a moment as callers join the queue. The first question comes from Stephen Lee with Raymond James. Please go ahead.

Hey, guys. Stephen, I know visibility is not the best right now, but can you at least say whether you will be growing fiscal 2025 over fiscal 2024? Thanks.

Thanks, Stephen. Yeah, thank you.

You know, I do, again, as you mentioned, you know, the visibility and, you know, we don't typically provide formal guidance in normal course anyways, but we're trying to be mindful of that. But, you know, I want to try to outline some of the significant factors going ahead. So, you know, we do have these 123 operators engaged all across the world for DA, cable and fiber access, and our market share has really grown significantly, you know, being as a leading vendor in the industry. But, you know, it remains a case that the industry is still in the early stages of this essential transformation that the network's undergoing to multi-gig services and broadband and 10G. So, you know, nothing's altered from the major thesis that we've built and, you know, we've propagated into the industry and penetrated and monetized already. You know, it's just a matter of qualification, timing, you know, transformations of this magnitude, you know, where the operators are unlocking you know, major value from the network by digitizing, virtualizing. It can, you know, take a long time, and in this case, even longer than anticipated for preparing, you know, the certifications, the qualifications, multiple vendors, multiple generations of technology to qualify. So, you know, the benefits, though, of going through that are, you know, very material in the long term with some of these large operators we're working with. So, you know, thinking back and looking back to how we see things playing out in fiscal 25, you know, we're still going to be contending with some more of this timing uncertainty until we get through, you know, this ramp up that the operators are working steadily towards, you know, but it's going to limit our growth this year. Could be, you know, in the range of the top line last year, you know, maybe slightly upward as we work through the second half.

Okay, that's very helpful. Okay, and then, Sumit, on the mix, the EN9000 stand alone, so more of that in the quarter versus fully loaded RPDs, what needs to happen for your customer to resume buying the fully loaded RPDs as opposed to just the shell?

Yeah, so I think, you know, the

customers such as Alamo are going through this major transformation, as I mentioned. I think a particular customer has even called it the largest operator of the network since the 1990s. So that's what the plan is. So it's taken, as I said, a significant amount of qualification effort, and that's necessary because of the magnitude of that very large network. I think they're one of the largest broadband service providers certainly in the U.S., not in the world. So they're going through that. And, you know, in the case of the cadence between the RPD modules and the EN9000, we're at the same time getting prepared with them. You know, in prior quarters, we had prepared a lot, and there was a lot of uptake of the RPD modules as the first stage. And now we're into the stage where they're preparing the EN9000 platforms that are core to this plan. So we need to get through to this snapping of the elastic band when the rollout starts to happen in the field at scale, digestion of both the N9000s and the RPDs together, and then we can get back to a more natural flow of their ongoing field deployments. Does that make sense? Yes.

So I guess, so first, so are we coming to an end of these qualifications? And then if yes, do we then go through a period where they have to digest the RPDs that they ordered maybe a couple of quarters ago first before you start to get back to normal?

Yeah, I think we're certainly, you know, the group of the customer and all the vendors working together are peeling the layers of that and getting to the end of the qualification cycle, you know, and it's important that the upgrade kick off and we're anticipating that. And, yeah, I think certainly, you know, ongoing EN9000 deliveries, And the RPDs are going to get digested. Like I said, you know, once you unlock the field deployment, it can be, especially the scale of upgrade we're talking about, it can be quite rapid of a digestion where you're rolling multiple markets. We've talked about, you know, having labor positioned and ready accounted for. And for this upgrade, and you know, across the time constant, the customer like that is looking out for the full upgrade. You know, if you look at a two to three year program, and think about how fast that needs to go. You've got a relatively rapid digestion cycle. Meantime, of course, the fiber access side of the business is moving forward. That's a higher margin segment. RDOF is accelerating. That'll be important to our mix. Our CDS is important to our mix. So that's how we think about things.

Okay, got it. Very helpful. And then last one for me. On VCMTS, so it sounds like some revenues we should expect in Q4, you said closer to the end of the year. Will it be in the form of like a one-time license payment or there's going to be a recurring element to it?

Yeah, you know, I don't want to get too into the weeds there, but, you know, of course, you know, licenses are involved with VCMTS. Um, and you know, the software solution and that's core. You know, there are recurring elements as well. You know, when we're talking about software, it's a higher component of maintenance and support that we need to have ongoing resources allocated to. And together with that, you know, you can have a higher proportion of recurring services revenues. You're also continuously adding, you know, feature sets and releases and migrating features on the VCMTS platform. Likewise, that gets you a higher proportion of service revenues. Okay, got it. Thanks. Thanks, Steven.

The next question comes from Ryan Kuntz with Needham and Company. Please go ahead.

Great. Thanks for the question. Appreciate your comments there on the gap node adoption there. Wanted to ask a question about your pond business, which sounds like you still have a pretty strong outlook there as kind of the rural build-outs continue and You know, are you seeing much of a shift away from 10 gig EPON yet, or is it really that's still kind of the main driver of your customer base there?

Hey, thanks, Ryan.

Yeah, I think, you know, as we've talked about before, you know, 10 gig upon has been very helpful for operators in this space on the remote OLTs, allowing them to, you know, rapidly have some velocity on programs like RDOF through how they configure that network through their, you know, DOCSIS ecosystem for management and whatnot. So that's continued to be the case and you know some of the scale of participants in the subsidy programs that we work with and that's resulted in our significant market share still um going strongly with 10 gig upon um you know of course uh the itu standards xgs and parallel um you know other participants not necessarily our customers today have focused on on uh xgs pawn um 10 gig which is 10 gig as well so we're both both in the 10 gig technology generation um you know ultimately i think you know that the The standards are moving towards 50 gig, potentially 100 gig going forward, and we expect some convergence of the standards in that generation. But, you know, the vast majority of deployments today, in fact, are still on GPON, you know, particularly in the U.S., and there's still an upgrade cycle even to get to 10 gig that's going on. Certainly the RDOF, you know, focus for us is on 10 gig EPON and And, you know, we don't anticipate any transition there in this cycle.

Okay. That's super helpful. Thank you. And on your, you know, positioning for your new virtual CMTS core, you know, how do you position that product relative to kind of your peers in the industry? What are kind of the differentiating kind of features or on your roadmap that you can kind of flex your muscles on there competitively? Thanks.

Yeah. Yeah, thanks, Ryan.

I think, you know, as always, that's some, you know, core to how we approach the market is flexibility and interoperability. And, you know, to some extent, you know, customizing to specific operators. um and and that's important um you know to digest such a um you know change in in their broadband network some you know operators have to deal with provisioning and billing orchestration um you know legacy platforms in some cases they built in-house they brought from third-party contractors for for the back office um and you know where we've excelled is uh you know migrating the solution to be flexible in that regard to plug in exactly how they need it. I think we always maintain the view that, you know, we have one of the best interoperability platforms in the industry. That's core to how we approach the market. And that, you know, is expected to be successful in VCMTS as well. There is also, I think, you know, a natural need in the marketplace for having, you know, a diverse set of vendors offering VCMTS that's very natural for us given our, you know, our IP that's been accrued in this space ever since the MACFI generation of time and what we've built up over these last 10 years. So, you know, considering Vesma's market share overall and cable access, you know, we're seeing customer response being very, very good for our entry into BCMTS.

That's great. Good to hear. Appreciate the questions.

Thanks, Ryan.

Once again, analysts and institutional investors who would like to ask a question should press star and one on their touchtone phone. We will pause for a moment so any additional callers may join the queue. As there appears to be no further questions, This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.