Super. Hi, I'm Ryan Koontz with Needham. I cover the broadband and cloud communication sectors here on the sell side. Really happy to have Clearfield with us today for a fireside chat. Cheri Beranek and Dan Herzog, CEO and CFO of Clearfield. Been working with you guys a long time. Really nice to add you to coverage a couple years back, and let's dive right in. Cheri, let's kind of start with, you know, recapping what we saw in calendar 2023 through your last reported results, and can you kind of summarize some of the puts and takes and the drivers behind, you know, what we saw in 2023, and what were some of the pressure came from-
Sure
in the business?
Right. Well, you know, Clearfield, for those of you who are new to the story, provides a fiber management and fiber delivery platform that allows our customers to pass and connect homes, you know, with fiber, providing an opportunity for those customers to, you know, have a lifestyle that better broadband provides. And Clearfield does this through a platform that reduces the cost of labor, the amount of labor, and the skill level of labor that's necessary. You know, what we saw through the pandemic in 2023 as Ryan talks, is we were very aggressive in really being able to go after our base of business, which is community broadband.
You know, it's now thousands, it used to be hundreds, of small service providers across the country who are responding to this need to deliver fiber, and we grew very fast. You know, 50% in 2021, 90% in 2022, because we were able to, you know, provide those needs. However, what we did see in 2023 is that there was, you know, quite a bit of inventory that had been placed in those environments, and, as a result, in 2023, our revenues and our and our backlog, you know, fell, so that we were really kind of not providing the level of return that you're used to at Clearfield.
You know, really I think what we've seen is our customers were doing, because, you know, material was was available, and, money was cheap, they went from a just. They kind of did a just-in-case ordering, and today they're doing just-in-time ordering.
In 2023, the underlying demand was absolutely there. The Fiber Broadband Association released numbers in December that the industry passed nine million homes in 2023, compared to a little over seven million homes in 2022. So that level of 15% growth is there. It just is masked by the amount of inventory that's in place. What we're seeing now as we get out of the 2023 rhythm is we have some customers who have forks, but they need knives. So they've got some of that inventory, but we need to be able to replace parts of it to be able to finish their builds.
We're also seeing signs that the build season will be the time in which we will work through the inventory that's there, and we'll start to see some of the real demand, and it'll be easier for investors to be able to follow us.
Most of this is customer-located inventory as opposed to distributors?
Absolutely. I mean, even though and we sell about 50% of our business through distribution and 50% on a direct basis, but we do not ask our distributors to you know to stock inventory for our benefit. We're probably through distribution, most of what we do is actually drop ship directly to the end customer. T he distributors are more of a financial partner, so that they can have a single purchase order or a single point of representation. O ur distribution channel business does not have that heavy overload of inventory, and so that's majority, that means community broadband. F or those of you following us on a quarterly basis, you know that we separate our business into the types of customers that are ordering.
We sell to MSOs, which is a big growing part of our business. We sell to community broadband, and we predominantly then serve large regional providers rather than the big national carriers. We found that the national carriers are served by Corning and CommScope. Corning does a fabulous job on the national carriers. W hat they don't do is do a great job on the smaller providers who need an extra level of support. And so you'll see our biggest growing business has been the large regionals, who predominantly didn't do fiber before the pandemic. T hese are companies like Frontier, who came out of bankruptcy, Windstream, who dealt with their bankruptcy and committed to fiber deployment.
Lumen, who was struggling to figure out their identity, but then after selling off to Brightspeed, is now starting to deploy fiber as well. And so those large regionals really act like community broadband deployment because they deploy in those small communities, kind of one community at a time, which represents a big growth opportunity for us.
Yeah, for certain. And in terms of your big growth you saw in 2021 and 2022, so obviously a nice growth going on in the market there, and you took some share, I think. And so, what's been the outcome of those share gains? Have you held on to some of it, most of it? I mean, what's your general view on some of your share gains you saw upmarket?
Right. Well, we worked very hard during that period to, because we had capacity, we could choose customers. W e wanted to work with customers who didn't buy product from us just because we had it, but because they knew that it was better. W e spent time doing pilots, demonstrating that the labor savings, that they could pass twice as many homes using our cabinet line than if they were using a traditional level of deployment. O nce they saw that level of, that it wasn't about the availability, but that it was, they were going to be able to do this better, we believe that we've have kept share almost exclusively, you know, throughout that space.
The opportunity there really has been to develop that relationship, and especially at that large regional provider that needs that extra level of support that they may not be getting from, you know, from a Corning kind of solution.
As far as the government subsidies the whole industry is excited about here. We had, for those of you not familiar, we had RDOF, boy, four or five years ago. We've got ARPA awards going on now. Those are both smaller, kind of in the mid to high single digit, programs in terms of billions. T hen we've got BEAD, of course, coming, which is a $42 billion subsidy pool.
Can you kind of walk us through how you see those programs layering on? Have you seen some effect from RDOF and some effect from ARPA yet? When do you expect BEAD?
BEAD in place. Well, you know, RDOF was, I think, an exciting time for the market to, to really identify the maps and to see where the underserved communities were. And, you know, the government did some things right and some things, you know, not so right. But, you know, on the RDOF deployment, it was for unserved homes at that point, and they asked for basically a bid auction in regard to who was gonna be able to service it. So they awarded $9 billion, but then they took back, that's the good part, right? They took back some from people who actually didn't prove out what they could do. So there was some, the-
Starlink.
Starlink, thank you.
Yeah.
Yeah, $2 billion that they pulled back.
[crosstalk] Starlink and LTD Wireless and Satellites were disqualified after the fact.
Because they said they could provide the service and then didn't, so took the money back into the reserves. That was good for us as taxpayers. But from an industry standpoint, we saw a lot of both smaller and larger players being able to benefit from it, and prove out that fiber is not only for easy-to-deploy markets, but that it really works better than a wireless solution if you've got the funding to do it, because this is what I really like about today's government programs, is it's designed for the long term. It's not designed to solve a short problem with a software fix like we did, you know, back in the 2008, when we threw some money at it.
These are really about let's do fiber, let's do fiber on the long term, and let's prove out that we can provide, you know, gigabit-level service. So we saw that both in community broadband as well as, surprisingly, in the cable markets, in that they were gonna be able to go after the RDOF world. I would say the ARPA environment has gone to smaller players, and individuals who are ready to be able to move fast, and so ARPA has been a faster deployment, and an opportunity for community broadband to get money. The BEAD dollars have had a lot of strings. BEAD is very exciting.
It's a huge amount of money, and it's an opportunity to really say, you know, you know, identify 13 million homes that were never gonna get high-speed broadband if the government didn't step in. And so we've really gone through the BEAD program now, and they've developed that map. They know where they're serving. They've gone through, t hey had million challenges to that original map, but then processed them.
[crosstalk] Address change patches.
Yeah, address changes, you know, but addressed them and went through it, and did it in a timely manner. So, BEAD right now is more of a, it's still a concept that's there. We got $42 billion that's gonna be awarded. The maps are in place. They've been accepted. We know which states are gonna get what money, and now it's the states' turn to be able to award it. Now, unfortunately, there's going to be, again, some challenge processes, so there's maybe 60 to 90 days after the awards, and then we actually know, who's gonna get the money, and then we can start engineering.
So you probably have seen these slides about this huge amount of business that's coming in 2024, because it's this $40 billion. It's awarded, but it's not gonna be spent, you know, in 2024, and I think that's an important part for us to walk through, is we're watching it. It's gonna be five years of some really fun business for us that'll be different. It'll be smaller cabinets, longer cables, really working in those, the spaces that haven't seen broadband before. But it'll be incremental business, and an opportunity to really deploy in our sweet spot be cause, you know, and I think that's-
Extreme rural, which really plays to you.
Extreme rural, which is our world. So we couldn't be more pleased, and I think that's the how we're building our infrastructure today, is to be able to be ready to respond to that. Unfortunately, you know, our break-even point is about $50 million a quarter, so we're gonna have, you know, a quarter or two where, you know, we're not gonna be quite there. But, you know, that's it, the market is deploying. We just don't have that revenue right now. And so as we get through the build season, it's gonna, we'll be ready to respond.
On BEAD, are you largely thinking 2025 is a decent step-up?
Yes, absolutely.
driven by BEAD? Which is great.
Yeah, and I think that's why 2025 is where we're gonna be able to start, because we really are the, have the highest market share in passing homes, and so that comes first.
Yeah.
Then we will concentrate on being able to use the active cabinets and then the other parts of the drops to be able to extend the total available market, the TAM, you know, that we could be able to deliver.
Okay, so any comments around, you know, pricing you saw in 2023 with kind of, you know, diminished demand and inventories? Has the pricing environment gotten a little tougher?
You know, any time you've got a supply and demand marketplace that's not in balance- you know you're gonna see some price pressure.
Yeah.
You'd be naive to believe that that wasn't gonna happen. There's, you know, there's two kinds of pricing pressure. There's normalized market pricing pressure, which you can sustain to, and so we always want to be able to meet that, and so we've got a very aggressive product management program where we identify a sales price request, and so the sales team can be able to provide market intelligence as to where is the market price. Now, if it's truly market pricing, you know, we've got the means by which to continually cost reduce our solutions to meet it. But if it is dumping, right, we're gonna ignore it, because it's not sustainable. And there has been some dumping. It's difficult for a service provider to, you know, to not acknowledge it.
I say even with the dumping we have in last year, we just perhaps have lost a couple of cabinets, here or there.
Yeah, and that's mainly coming from bigger players in your space?
Yes. Right.
Yeah. I mean, certainly, you know, CommScope is kind of wounded right now, so they, I'm sure they're at the top of that list.
There's distressed entities out there-
Yes, sir
... and they will do desperate things, and so, you know, but if some of our customers actually have enough inventory, they're not even biting on that.
Yeah.
So it doesn't necessarily pull them out of the hole.
And Dan, on the margin front, can you-
Yeah
... have you talk about how the gross margin trend of late? We've seen a step down, kind of what the components there. Kind of bridge us to the kind of the-
Right
... where we are today on margins and how-
Right
... investors should think about that going forward.
Right. So we, you know, we went into our fiscal 2023 with a guidance level of up to, like, $380-some million. So we had capacitated ourselves towards being able to make that and stepped up our facilities, brought on a couple new facilities, 300,000 to 400,000 more square feet, and so we've capacitated ourselves to that. So, it worked out really well, in when we captured a lot of share. However, with the excess inventory overhang that's out there, you know, we can reduce our variable costs quite a bit, and we have. We've been very aggressive on that, and we've been doing that on a continual basis to match up with the orders that we've had.
But we do are sitting right now with excess capacity, and that's affected our margins here. So, you know, you'll see those being down, but, you know, that's our commitment to the long term. We're not shedding any facilities. We're being very aggressive on our variable costs, but, you know, we're not, you know, shuttering any facilities or anything like that. We still have a long-term market ahead of us. Just think of what Cheri just talked about, the BEAD, and we talked about the $50 million roughly of being a target out there.
So you'll see incremental improvement as we get from wherever we end, wherever we are, towards that number there. But once we get beyond that number, that $50 million, you know, our incremental margin really helps. You know, it's a, it's a good portion that helps fall to the bottom line, and you can see us returning back to, you know, starting in the 30s and then heading up towards. Our goal is to get up, you know, approaching 40 at some point in time again, like we were in our original forecast for 2023.
Great, that's really helpful. On the, in terms of kind of the, the different customer segments and how investors should think about, calendar 2024, what are some of the puts there, puts and takes there, Cheri, in terms of, your strength in community broadband? You expect that to generally remain fairly robust, I think you've said.
Right. I mean, the community broadband for the year will absolutely be robust in that they don't have the inventory overhang that we see other places. But we have to be careful in that they have more of a seasonal structure than what you would see with the large providers.
Right.
Be careful when you look at our numbers for Q1 and Q2 , because the winter months definitely affect community broadband more aggressively.
Your fiscal first and second?
Our fiscal first and second.
Okay. Got it.
That's, you know, October through March.
Right.
Yep.
Right. As you look at kind of the growth in outside of that, we are excited about where the regional providers are going. That said, I think there's when they start, you see it quickly. When they stop, you see it quickly.
Yeah.
So there's certainly been some evaluation of what they want to do. I think in the MSO space, you see some of the same thing. We saw inventory overhang in the MSO space.
Yeah.
But all of that will kind of come together over the summer. You know, it's you know operating in an environment where you truly have. I would say probably the only customer that we have had over history which would have a surprising bill structure is Alaska Communications, where we get all of we ship all of their stuff in February, because they want it sitting on the ground as soon as they're ready to be able to deploy, so they can leverage that whole market. The others we're gonna see more just in time. And so, the first couple of quarters probably or will be uncomfortable.
Yep.
But what I can tell you is, I can't tell you what quarter to invest, but we absolutely are in a place in which this is a market that's growing, you know, 10% to 13%. It's masked by the amount of inventory that's out there. You know, the reason to invest in Clearfield from the beginning was we provided a better solution for broadband because of the reduction in labor. So I think you've got to go back to the original value proposition, the original reason to invest, and know that the market, it will. It's coming. It's there. It's just right now being hidden by what the pandemic did to us.
Yeah. So in some ways, you see the market reverting to pre-pandemic behaviors, right? Where you have a slow December and March quarter and gangbusters June and September.
Right. Exactly. I mean, you could deploy fiber in this market, but it's gonna cost more, right? If it's cold outside, people move fucking slower.
Yep.
If the ground is frozen, it costs, it takes more time. So you're much better off to be able to do your central office work during the winter and then, you know, go back to the actual build in the summer months- regardless of where you live, North or South. Hey, Kansas City was not supposed to be 10 below, so you never know.
On top of the weather, you also have the budgetary cycles going on-
Absolutely. Thank you, Drew.
[crosstalk] for the operators, right?
Yes.
They, they don't typically release budgets until sometime in Q1.
Right, and especially, you know, the larger ones who are public companies.
Yep.
So they've really got to kind of work through their CapEx structure and be able to know when they want to do what and how. So sometimes we get caught in a world in which, you know, engineering says it's a go, and procurement- .. says it is a go, and then all of a sudden the board says, "Mm, no, let's wait a quarter.
With the rising interest rates lately, then there's a new entrance into the, some, you know-
The bank
... the cost of capital and everything like that. So we've heard of that affecting some plans.
We heard a little bit from you, and I think from one of your peers that have a lot of exposure in community broadband about this A-CAM versus BEAD debate. Do you have any insights you can share? Kind of what, what's going on there? How would you simplify that for an investor to understand that?
I would say it was a period of time of confusion.
Okay.
I mean, all of the signals from the government were that A-CAM was gonna be discontinued. So everybody was looking at BEAD as their only option. When A-CAM came back, all of a sudden there's more money in this space, and, you know, a service provider's revenue stream is heavily influenced by the operating support that they get from the government. In that the telco portion, because, you know, by definition, the service provider must provide service to everyone. Some of those provider sites, you know, are not economical, and so that's why the government has always stepped into that space. A-CAM is a little bit more of an operating support than a CapEx support, although it does do both.
The service providers had to be careful to ensure that they went after the right money in the right place to leverage it all. So that takes time. I would say that we view it as the more money in the market, the better, because the service providers need that for their capital deployment. It just slowed us down for a couple of quarters.
I think it slowed your customers down as well a little bit.
Oh, absolutely.
Yeah.
It slowed the customers down, but yet overall in the marketplace, we still saw, you know, that growth to 9 million homes. S o it's like the labor moves from one place to the other when one customer or one service provider isn't moving, they just move to another solution. So I think, like I said, I mean, Calix is certainly very close, based upon their revenue stream that comes from ongoing operations and their software. They, they saw it first. But it absolutely has been an influence, it was a negative influence for the year, but not a negative influence for the market overall.
Got it. And kind of wrapping back to BEAD again, there's a lot of press around Buy American, the whole BABA requirement. Can you walk us through your kind of plans and preparation?
Right
To comply with some of the strings that are attached to the $42 billion?
Billion dollars. W e have, you know, part of the product line which has always been made in the U.S. and will continue to be made here. We did invest, you know, substantially in, you know, the Mexican plant. But the same time that we did investing in the Mexican plant, we also invested in the U.S. plant. So, if it is a BABA-required product line, we will make it in the U.S. like we did from the beginning. You know, unfortunately, there are some costs associated with that. So, we're gonna probably end up having two SKUs at different prices based upon what a customer needs.
It won't affect our gross margin, and that as an industry, you know, we've identified that, you know, we need to be able to sell product at a, you know, at a, at a space where we all can make money. So there will be some cost challenges for the service provider, and they'll have to work through those, their planning to what the costs are actually gonna be. The other thing I'm excited about, though, is that we're gonna start, building cable in the U.S. as well. We are expanding our cabling production to beyond the Mexican plant. We will have multiple lines in our U.S. plants as well.
Great.
That will provide us more capacity, more different products. We can really leverage the, you know, our engineers in Finland to produce, you know, different kinds of cable for us here and to be able to go after different specialty markets.
Right.
When we bought the Nestor environment, it was not for European operations. It was to be able to consolidate our manufacturing of cable as close to where we terminated it as possible to reduce cost. The opportunity now in Europe, if I could extend from that, is to be able to look at Nestor and say, "Now, how do we leverage the Nestor footprint for for connectivity opportunities in Europe?" So when we, when we bought the Nestor environment, I mean, cable is a really low margin. If you don't terminate the cable, you know, cable doesn't sell at 40% margin.
You know, it's been operated at a substantially more commodity-level margin space. So if you look at just cable coming out of Europe, it's low margin, and you'd say: What are you doing, you know, with that company? But what that does allow us to do is now to go after select markets with a connectivity platform, to be able to pull that cable through, terminate it, and improve the margin for everything that we would do.
What we did in 2023 is I tend to be highly conservative, and I hang on to my cash. Even if we did raise $100 million last year, I wanted to be careful not to throw it away. And so in the European market, rather than aggressively go after the market with U.S. product, which always fails, we really wanted to look and find what are the particular market opportunities that we can deal with. O ne of them is they use air-blown fiber rather than, especially in the British market, rather than the traditional fibers that we use here. We 're designing a cassette that will allow us to actually blow fiber into the cassette itself, and then to be able to use it into, you know, the different markets.
That part is done, but then we learn from a cabinet standpoint, that especially in the German marketplace, all of the cabinets are a preformed type of polyurethane. That puts us in a position where the mold for those cabinets would be in excess of $1 million. So we're like, "Okay, we better make sure it's the right one, or should we actually, you know, partner with a cabinet vendor instead?
Right.
We're going through all of those designs. Another example, in Germany. Germany's got very, very small fiber penetration. But so there's lots of opportunity there. Very similar to the U.S. market in that Deutsche Telekom owns 50% of the market, but 150 small players own the other 50%, and so perfect community broadband-type deployment, you know, for Clearfield. By German law, you have to provide 4 fibers per home. Well, none of our products were designed for 4 fibers per home. B ut our product line, due to its modularity, we can bring a 4-fiber solution with a modification. Y ou'll see that, an announcement of that product probably mid-February.
Trying to design innovative solutions that are different than what they have, but are common to the design principles, so that we don't have to change the way they install, they simply look at a lower-cost deployment methodology.
Interesting. Is that fou t fibers, because due to, like, wholesale and bundling requirements to other operators maybe?
It's more of a, like a, future-proofing.
Okay
In that, you know, 60% to 80% of the cost of deployment is labor.
Yeah.
The fiber itself is a minuscule cost.
Yeah.
And so if you add, you know, three more fibers, it future-proofs it. You know, they don't, you don't terminate it, which is where the cost is.
Yeah.
So you terminate one, you know, bring the other three along for the ride, and then see what you're gonna do with them.
Right. I know, I mean, most of your business has been driven by Homes Passed, and you've had a Homes Connected product line, and I think you have some new Homes Connected products coming out that you think can boost that business?
Yes.
That's even a larger TAM, I think, opportunity.
Oh, absolutely.
Can you kind of walk us through that?
Sure. You know, the our revenue opportunity per Homes Passed is about $50 per home. But the revenue opportunity for Homes Connected is somewhere between $200 and $400. And so, at a take rate of 40%, which is what the market is currently at, you know, that's a significant revenue opportunity that we haven't, we don't have the same share. T he reason for that is that Corning, a couple of decades ago, introduced a product called OptiTap, which is a fabulous connector. They licensed it to CommScope and a number of others, and it became the industry standard. It's the way it's always been done, right? And so we, it was a difficult to try to be able to come in with an entirely new infrastructure, especially when they've got assets already deployed.
You've got to be able to support those assets, or they become orphaned. What's happened now is that those patents have expired. We have the opportunity to support those orphaned assets with connectors that we have designed ourselves, or that we've designed in concert with Senko. And then we also have the means by which to design a whole new platform, because Corning's coming out with a product line called Evolv, CommScope's coming out with a product line called Prodigy, and we have a product line called SeeChange. And so SeeChange is a means by which to have a fully hardened connector that's easier to deploy, easier to engineer, and that's something that hasn't been talked about a lot.
It hasn't been talked about, because, you know, there are only so many engineering resources in the marketplace, just like there are only so many labor resources. SeeChange was announced and brought to the market last year. Pilots and kind of trial solutions that we went through with the engineering firms last year, and so this year is really our means by which to bring it to market. And so there'll be some white papers and cost studies that will be released from actual pilots last year, to see how we can kind of get into that space even better. Not that we haven't had share in connected homes in the past, in that we've used the YOURx platform, we used part of our MPT solutions, to pass.
So maybe about 50% of the time, especially in Community broadband will we get the home connected. But it's really the opportunity now with the large regionals to take our position that we gained in the last couple of years in passing those homes, to now be part of the connected story.
That's great. That's great. In terms of competition, homes passed, I assume there's not a whole lot of changes. Is it a little bit different competitive environment in Homes Connected in the, for the new SeeChange?
I mean, certainly the big players still dominate in that space.
Yeah.
So we're still gonna go after, having to be able to kick out, you know, a larger provider. There have been a number of, of new providers coming into the marketplace, just based upon the size. And most of those providers are coming in from, from outside of the United States. So we have, you know, Emtelle from Scotland, we have Hexatronic from Sweden.
Both of those places are very fiber-rich, and so there's been a lot of field work and a lot of proven solutions, although they're different in that they're, you know, principally air-blown, so they're coming in with a different idea for the U.S. market. Sterlite coming out of India, so these are players that we haven't seen share.
Yeah
Certainly players that are, you know, invested some money here and are looking for a way by which to come into play. I think it's important to remember that it's not just about product availability, it's about the service solution.
Right.
Clearfield differentiated ourselves early on by deploying a very large sales force in the communities in which we are serving. And so that level of extended resources is different from our competitors, who typically will service, you know, a large regional at their corporate offices but will rely upon the distributors to have the field relationship. So we have always felt that the technical relationship was ours. R egardless of whether or not it was sold through distribution or direct, and that differentiation, I think, will be one of the reasons why we built the company for community broadband and the BEAD solution and some of those dollars. You know, it's our space. I mean, community broadband is in our DNA, and BEAD will be a big part of the community broadband opportunity.
That's great. We've got a few minutes left. Any questions from the audience anybody wants to throw in?
Talk to you.
Yeah. Rob?
Oh, M&A, how active are you, you know, looking at the framework ... what could be done? Should we expect something to happen in 2024, big or small? You've got?
Yeah. Thank you, and we're very proud of our balance sheet. If the chairman of the board would say, "Just because you have a credit card doesn't mean you have to use it." And so, we got a really nice position. We spent the last 15 years building a company for right now, but we also need to look at the acquisition marketplace for what's the next opportunity. W e're gonna bring products to market with our active cabinet line, which are about being able to bring electronics into the field. It's the next generation of what fiber is going to do.
If there was an opportunity to extend a sales force or to replicate, you know, a sales force in a different market, that would certainly be interesting. You know, I've got a really great innovation team, so we probably aren't looking at a lot of new product options. But I'm also not gonna spend it just because we have it, and so w e talk about patient tenacity. So, patience, but very deliberate in looking. So, I'm shopping, but I can't tell you if I'm buying.
I would say just because we haven't spent it, doesn't mean that we're not doing some good due diligence in that world and being opportunistic so.
Any other questions? Cheri, any last comments you wanna wrap up here? We've just got a couple minutes.
Well, I hope I have the opportunity to bring fiber to all of your homes. I'm waiting for mine. I think I have just a fun story that I think helps you identify the fact that how much fiber is needed and what it can offer, but also why it has to be done right. So, my mother is 86. She turned 86 yesterday. She lives in a community broadband-served environment. Part of the solution that passed her home last summer, I got the passing, right, was mine. It was a very proud moment for Mama and for me. But I didn't get the connected business. Yesterday, on her birthday, it was, had been very cold in Minnesota.
It was, you know, wind chills 25, 30 below, you know, negative 10 degrees actual temperature and her fiber went out. So you had an 86-year-old lady on her birthday with no TV and no cable internet and not a very happy lady. T hat's the dependency that we have on fiber and the dependency on doing fiber correctly, and that you wanna make sure you have hardened solutions, and why Clearfield is going to get that share and be able to do it right. So we're excited about the next five years. I hope you're part of the story.