CommScope’s CEO says it will mitigate tariff effects with its flexible global manufacturing footprint
CommScope is the latest telecom vendor to announce a plan to navigate the rapidly changing tariff situation posed by the Trump presidential administration, citing options to ease the effects on how it serves customers.
Speaking to investors during its first quarter earnings call, Charles Treadway, CEO of CommScope, said it is monitoring the implementation and impact of the new tariffs and the fluidity of the situation.
“Assuming tariff rates remain constant, we have developed and are implementing our plan to mitigate the effect of tariffs over the next 90 days with our flexible global manufacturing footprint, our broad supplier base and commercial strategies,” he said. “We are very supportive of U.S. manufacturing and produce many products in the United States for the U.S. market.”
Today, 80% of CommScope’s first-quarter sales came from products manufactured in the United States or compliant with the United States-Mexico-Canada Agreement (USMCA).
“We have a very flexible manufacturing global footprint--and we manufacture products close to our customers,” Treadway said. “And the only business really that was an outlier is our Ruckus product line, but if we excluded Ruckus from our U.S. percent of sales, we'd be at 90%, meaning our products are U.S. origin or USMCA compliant. Ruckus gets more of their products from either Vietnam or Taiwan,” which a large portion of “fall under the tariff exemption.”
Data center positioning
Led by the Connectivity and Cable Solutions (CCS) unit, CommScope reported net sales rose 23.5% year-over-year to $1.11 billion due to higher net sales in all segments. Net sales increased across all regions, except the Caribbean and Latin America regions, in the first quarter of 2025.
Driven by an increase in the Enterprise business, CCS net sales of $724.1 million were up 19.7% from the same period a year ago.
Within CCS, the enterprise fiber business was a shining star, holding the products that CommScope sells into the data center market. During the first quarter, the Enterprise business drove revenues of $213 million, up 88% year-over-year. The enterprise fiber business represented 29% of first-quarter CCS revenue versus 19% in the first quarter 2024.
Treadway said that while CommScope is “well-positioned among the market leaders in this space, the market demand in our enterprise fiber business is not solely driven by growth in data centers but is amplified by additional demand for CommScope products in new generative AI-focused data center architectures.”
He added that “AI builds use large language model training clusters and can require upwards of 10x the number of fiber connectivity versus a traditional compute cluster.”
Broadband movement continues
In the broadband portion of CCS, CommScope noted that demand was up compared to the first quarter of 2024, due to the growing adoption of its Prodigy Connector Solution, for example.
Prodigy is a hardened solution that can adapt to various network topologies, whether in low to high-density environments or new and existing network deployments. Prodigy terminals compactly integrate current and emerging technologies and support fiber distribution, indexing, and TAPs.
“We continue seeing an order trend increase and believe that customers have normalized inventory and are back to demand matching the deployment rates,” Treadway said. “Recently, our team secured several domestic and international wins for our Prodigy Connector Solution, a patented connector technology that allows our customers to deploy fiber-to-the-home solutions more efficiently and sustainably.”
Likewise, CommScope is eyeing the BEAD opportunity. “We still anticipate BEAD funding will positively impact our revenues,” Treadway said. “However, we don't expect anything meaningful to materialize by 2026.”
With a healthy mix of market growth, new products and normalization of customer inventory, Treadway said that CommScope is “encouraged as we continue to move forward into 2025.”
“In the first quarter, we grew CCS backlog by $128 million or 37% and would expect to release some of the backlog as we bring on capacity in the second quarter and the remainder of the year,” he said.
Having seen year-over-year improvements, CommScope said the channel inventory issues are behind them.
The company is also starting to see the impact of adding incremental selling resources. It recently won a large deal with a higher education customer featuring Ruckus Edge, which deploys networking, security, productivity and industry vertical-specific services.
CommScope continues to dominate the cable industry’s DOCSIS upgrade cycles. Driven by its deployment of new DOCSIS 4.0 node and amplifier products and higher legacy license sales, Access Network Solutions (ANS) net sales rose 20% to $225 million.
“We believe ANS is well-positioned with decades of knowledge of our customers' ecosystems and our breadth of products for service providers to take advantage of the latest DOCSIS upgrade cycle,” Treadway said. “Our product range includes all areas of the HFC network, including DOCSIS 4.0 solutions for virtual CMTS, nodes, amplifiers, and RPD and R&D modules.”
Treadway added that it has “moved our virtual CCAP program forward again by completing several field trials that have resulted in winning business with major Tier 1 global customers.”
Driven by an increase in all segments, CommScope reported net sales from continuing operations of $1.1 billion, up 23% year-over-year.
For related articles, visit the Business Topic Center.
For more information on high-speed transmission systems and suppliers, visit the Lightwave Buyer’s Guide.
To stay abreast of fiber network deployments, subscribe to Lightwave’s Service Providers and Datacom/Data Center newsletters.
Sean Buckley
Sean is responsible for establishing and executing the editorial strategies of Lightwave and Broadband Technology Report across their websites, email newsletters, events, and other information products.