Optical Cable (OCC) Q2 FY26 earnings call: the analyst Q&A

Does the large Tier 1 data center deals, like Corning's with Meta and NVIDIA, present an opportunity for OCC to provide customization, engineering, or additional services?

Neil Wilkin stated that OCC typically does not provide those types of services. He noted that while Corning has deals, they don't necessarily impact OCC, and OCC is not seeing any limits to its growth in its targeted data center markets.

“No, typically, we don't provide those sorts of services outside of OCC if you're talking about services, I mean, Corning has a number of deals, including 1 with NVIDIA and -- but that's not necessarily impacting OCC and -- but we're not seeing any limit on our ability to grow in the markets that we're targeting, particularly in data centers.”

asked by Sergio Masco · answered by Neil Wilkin

Are there any expected issues ramping up capacity, such as labor availability or cost?

Neil Wilkin acknowledged that ramping up capacity can have challenges but stated that OCC is not currently experiencing or anticipating such issues. He reiterated that OCC has some excess capacity, and they are evaluating adding personnel and equipment as appropriate.

“So I mean, whenever you're ramping up capacity, you can have challenges. We are not experiencing challenges in that regard at the moment and don't anticipate it at this time. As we've disclosed in our Form 10-Ks and 10-Qs, we have what we believe, some excess capacity, of course, the ability to utilize that excess capacity depends on product mix. We're also looking, as Tracy mentioned earlier, at evaluating our capacity and making some increases from -- by adding personnel as appropriate as well as some equipment.”

asked by Sergio Masco · answered by Neil Wilkin

Is the partnership with Litera helping obtain raw materials like fibers, and how is the partnership viewed in the current business environment?

Neil Wilkin expressed satisfaction with the Litera partnership, highlighting their complementary nature and the opportunities it provides. He confirmed that Litera is a supplier of optical fiber, and OCC has been fortunate not to have significant problems with fiber supply, with some exceptions for certain customers.

“So we are very pleased with our partnership with Litera. We think that OCC and Litera complement each other, and we are excited about the opportunities it provides for both companies. OCC has worked with Litera, which is a supplier of optical fiber as well as other suppliers for really decades. And at the moment, we've been fortunate that we have not been having any significant problems with fiber supply or other raw materials. There are some exceptions to that statement that have impacted certain customers, unfortunately. But as a general rule, we're not having that issue.”

asked by Unknown Analyst · answered by Neil Wilkin