Vistance Cuts Outlook as Profitability Weakens
Core adjusted EBITDA fell 43.3% as memory-chip costs and stranded expenses pressured profitability.
Vistance Networks (VISN), the networking-equipment maker, reported a 1.4% decline in second-quarter net sales as shrinking margins overshadowed sequential revenue growth.
The quarter marked a change in trajectory after two quarters of adjusted gross-margin expansion. The margin fell to 35.3% from 39.0% in the first quarter and 45.8% a year earlier, reflecting higher memory-chip pricing and the comparison with strong prior-year license sales.
Net sales declined to $319.6 million from $324.1 million a year earlier, though they rose 7.1% from an implied $298.4 million in the first quarter. Adjusted net income fell to $28.2 million, or $0.12 a share, from $36.7 million, or $0.13 a share.
Aurora sales slipped 1.0% to $319.2 million as weakness in the legacy business offset part of the increase in Access Technologies. U.S. sales rose 1.1%, while EMEA sales fell 26.3% and Canada declined 15.3%.
The pressure was sharper in operating results. Aurora operating income fell 85.9% to $7.0 million, and Vistance recorded a consolidated operating loss of $8.9 million, compared with income of $7.8 million a year earlier. Restructuring costs increased to $8.4 million from $1.6 million.
Vistance lowered its full-year Aurora adjusted EBITDA outlook by $25 million from its first-quarter guideposts. The company now expects $200 million to $225 million due to continued challenges with memory-chip pricing and availability.
Free cash flow remained negative at $74.7 million, though the outflow improved by $154.1 million from the first quarter. The swing followed positive free cash flow of $255.5 million in the fourth quarter of 2025.
The company completed the $1.846 billion sale of RUCKUS on July 1 and specified a $5.00-a-share special distribution due by the end of August. That payment brings 2026 shareholder returns to $15.00 a share, or $3.4 billion, while Vistance expects to finish the year with $700 million to $750 million in cash and no debt.