Clearfield, Inc. Reports Net Loss of $528,000 and 15% Decrease in Net Sales for Q2 2026

Clearfield, Inc. reported a net loss of $528,000 for the three months ended March 31, 2026, translating to a loss of $0.04 per share, compared to a net income of $1,327,000, or $0.09 per share, for the same period in 2025. The company's net sales decreased by approximately 15% to $34.4 million from $40.6 million year-over-year. This decline was primarily attributed to reduced demand from major customer segments, including a 38% drop in sales to Multiple System Operators (MSOs) and a 9% decrease in sales to Community Broadband customers. The gross profit for the quarter was $11.2 million, down from $14.0 million, reflecting a gross margin of 32.5%, a decrease from 34.4% in the prior year.

For the six months ended March 31, 2026, Clearfield's net sales totaled $68.7 million, a slight decrease of 2% from $70.3 million in the same period last year. The company experienced a notable increase in international sales, which rose to $2.4 million from $1.1 million. However, sales to Legacy customers dropped to zero following the sale of the Nestor Cables business in November 2025. The cost of sales for the six-month period was $46.2 million, resulting in a gross profit of $22.5 million, consistent with the previous year's gross profit margin of 32.8%.

Operationally, Clearfield's order backlog increased by 39% to $31.6 million as of March 31, 2026, compared to $22.8 million at the end of December 2025, indicating a positive trend in customer demand despite the current sales decline. The company’s selling, general, and administrative expenses rose by 15% to $26.4 million for the six months ended March 31, 2026, driven by higher wages, performance-based compensation, and increased IT and professional service costs.

In terms of liquidity, Clearfield reported total cash, cash equivalents, and investments of $147.1 million as of March 31, 2026, down from $165.8 million at the end of September 2025. The company has a $40 million revolving line of credit, which remains untapped, and is in compliance with all related covenants. Looking ahead, Clearfield anticipates that its existing cash reserves, along with cash flow from operations, will be sufficient to meet its working capital and investment needs for the next 12 months. The company remains focused on organic growth and potential strategic transactions while continuing its share repurchase program.