Rogers (ROG) Q3 2026 Earnings Call Transcript

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DATE

Tuesday, Oct. 27, 2026

CALL PARTICIPANTS

• Senior Director of Investor Relations - Stephen Haymore
• President and Chief Executive Officer - Ali El-Haj
• Senior Vice President and Chief Financial Officer - Laura Russell

TAKEAWAYS

• Net Sales -- $236.1 million, growing 9.3% year over year driven by demand in the electronics, communications, and automotive end markets.
• Adjusted EPS -- $1.39, increasing 54% year over year due to higher sales volume and improved margins.
• Adjusted EBITDA -- $47.7 million, representing a 28% increase versus the prior year.
• Adjusted EBITDA Margin -- 20.2%, expanding 300 basis points to its highest level since 2020.
• Gross Margin -- 34.2%, up 70 basis points year over year reflecting higher volume and favorable product mix.
• Industrial Market Revenue -- 34% of third-quarter sales, with growth supported by renewable energy and industrial applications across all regions.
• Automotive Market Revenue -- 24% of third-quarter sales, increasing at a high single digit rate year over year due to demand for ADAS and electric vehicle platforms.
• Electronics and Communications Revenue -- 20% of third-quarter sales, driven by strong sales of wireless infrastructure materials despite lower smartphone demand.
• Aerospace and Defense Revenue -- 15% of third-quarter sales, growing at a mid single digit rate behind higher defense and commercial aerospace sales.
• AES Revenue Growth -- 13.5% year over year, with performance improvements across all end markets within the segment.
• EMS Revenue Growth -- 4.3% year over year, led by automotive and aerospace applications.
• Cash and Short-term Investments -- $236.4 million as of Sept. 30, 2026, increasing $25 million from the prior quarter.
• Operating Cash Flow -- $41.4 million, up from $24.4 million in the second quarter.
• Free Cash Flow -- $35.4 million, increasing from $18.3 million in the prior quarter.
• Share Repurchases -- $9.3 million, representing a portion of the company's capital allocation strategy during the quarter.
• Q4 Net Sales Guidance -- $215 million to $225 million, reflecting expected year-over-year growth of approximately 9%.
• Q4 Gross Margin Guidance -- 32.5% to 33.5%, incorporating the impact of higher volumes and cost structure improvements.
• Q4 Adjusted EPS Guidance -- $0.90 to $1.10, compared to $0.89 in the fourth quarter of 2025.
• Q4 Adjusted EBITDA Guidance -- $37 million to $43 million, an anticipated 16% increase year over year at the midpoint.
• Full-year Capital Expenditures Guidance -- $30 million to $35 million, focused on supporting organic growth.
• Full-year Tax Rate Guidance -- 31% on a non-GAAP basis.
• High Growth Opportunity Targets -- $100 million in revenue by 2028 and $450 million by 2030, led by data center and battery technology applications.
• Suzhou Facility Costs -- Management noted that higher year-over-year costs from the new Suzhou, China facility partially offset EBITDA improvements.
• Design Win Timing -- Management expects full volumes from a major new design win for high-growth applications to be achieved by the second quarter of 2027.

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RISKS

• Russell stated, "higher commodity costs will continue to be a headwind versus Q4 of 2025," which may limit further gross margin expansion in the near term.
• Russell noted that while they achieved operational savings, "these were offset by higher commodity costs" during the third quarter.

SUMMARY

Rogers Corporation (NYSE:ROG) reported third-quarter results characterized by revenue growth across all primary end markets and the achievement of multiyear peaks in profitability and earnings per share. Management attributed the performance to disciplined cost execution, improved product mix, and higher factory utilization. The company is currently seeing high demand for advanced materials in the electric vehicle and data center sectors, which is driving a pipeline of new design wins expected to materialize into significant revenue in 2027. Management indicated that its growth strategy is ahead of its previously stated organic growth targets, supported by a healthy balance sheet and intensifying engagement with global original equipment manufacturers.

• El-Haj noted that customer momentum is accelerating in high-growth adjacencies, stating, "We see more intensity in those activities" as customers move toward product testing and evaluation.
• Management is evaluating strategic M&A opportunities, with El-Haj indicating that the company anticipates "some actionable announcement probably within the next couple of quarters or so."
• Data center solutions represent the largest high-growth opportunity for the company, specifically focused on high-speed digital applications and micro-channel cooling for AI chips.
• The company has completed its restructuring activities and expects to fully realize the remaining $13 million of a total $45 million in targeted cost savings as it exits the 2026 fiscal year.
• Management is advancing its EMI shielding technology with initial customer sampling targeted for early 2027.

INDUSTRY GLOSSARY

• ADAS: Advanced Driver Assistance Systems, which are electronic systems in vehicles that use sensors to help drivers with safety and convenience features.
• AES: Advanced Electronics Solutions, a Rogers business segment focused on materials for high-power electronics and wireless infrastructure.
• EMS: Elastomeric Material Solutions, a Rogers business segment providing polyurethane and silicone materials for cushioning and sealing.
• EMI Shielding: Electromagnetic Interference shielding, a technology that prevents electrical signals from interfering with one another in electronic devices.
• Thermal Runaway: A dangerous condition in lithium-ion batteries where a cell enters an uncontrollable self-heating state.
• Micro Channel Cooler: A cooling technology used to manage high power density in semiconductors, such as those used in AI data centers.

Full Conference Call Transcript

Operator: Good afternoon. My name is Diego, and I will be your conference operator today. At this time, I would like to welcome everyone to the Rogers Corporation Third Quarter 2026 Earnings Conference Call. I will now turn the call over to your host, Mr. Steve Haymore, Senior Director of Investor Relations. Mr. Haymore, you may begin.

Stephen Haymore: Good afternoon, and welcome to the Rogers Corporation Third Quarter 2026 Earnings Conference Call. Slides for today's call can be found in the Investors section of our website along with the news release that was issued earlier today. Please turn to slide 2. Before we begin, I would like to note that statements in this conference call that are not strictly historical are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 2000. And should be considered subject to the many uncertainties that exist in Rogers' operations and environment. These uncertainties include economic conditions market demand and competitive factors. Such factors could cause actual results to differ materially from any forward looking statement made today.

Please turn to Slide 3. The discussion during this conference call will also reference certain financial measures that were not prepared in accordance with U.S. Generally Accepted Accounting Principles. A reconciliation of those non GAAP measures to the most directly comparable GAAP financial measures can be found in the slide deck for today's call. With me today are Ali El-Haj, President and CEO and Laura Russell, Senior Vice President and CFO. I will now turn the call over to Ali El-Haj.

Ali El-Haj: Thanks Steve and thank you everyone for joining us today. I will begin on Slide 4. We delivered another quarter of meaningful year over year improvement in our financial performance with higher sales across all end markets and stronger profitability and cash flow generation. Sales were $236 million up 9% from the prior year. Adjusted EPS increased 54% to $1.39 the highest quarterly earnings since 2022. Adjusted EBITDA increased by 28% to $48 million or greater than 20% of sales. This result is the highest EBITDA margin achieved in the last 5 years. Over the past several quarters, we have intensified our focus on deepening customer relationships improving the speed of execution and implementing a more efficient operating structure.

These results highlight the progress we are making. We also continue to advance our growth strategy. In our core markets, we secured new design wins during the quarter and the growth outlook remains positive. Across our high growth opportunities, we made progress in several key areas. Customer engagement and technical validation activities for our data center solutions continued. While our thermal runaway protection and EMI shielding programs achieved important internal milestones. Looking to the fourth quarter, we expect continued meaningful year over year improvement. This includes approximately 9% revenue growth 12% adjusted EPS growth and a 16% increase in adjusted EBITDA. Turning to Slide 5. At 34% of third quarter sales, industrial is our largest end market.

Revenue improved slightly compared to the prior year, with higher sales into renewable energy and other applications. Sales increased modestly in all regions. Automotive represented 24% of Q3 sales and increased at a high single digit rate year over year. Growth was driven by improved demand for ADAS applications and stronger sales into both ICE and electric vehicle platforms. Electronics and communications accounted for 20% of sales in the quarter and continued to deliver strong growth. Performance was driven by higher sales of laminate circuit materials for wireless infrastructure, which offset lower smartphone sales. Aerospace and defense represented 15% of the Q3 sales and grew at mid single digit rate.

The increase reflected higher sales into both defense and commercial aerospace applications. Overall, the breadth of the quarter's performance is encouraging. Sales increased across all end markets, reflecting a combination of improved demand, new program activities and continued execution against our commercial priorities. Turning to Slide 6. We remain focused on accelerating growth by strengthening our position in core markets and applying our proven capabilities to high growth adjacent opportunities. Within our core markets, we secured a number of new design awards in Q3. I will highlight a few. In aerospace and defense, our laminate material was designed into a drone detection system. Rogers brand proven reliability and localized support were deciding factors in the award decision.

In automotive, our elastomeric materials were designed into a battery pack application with a leading EV manufacturer. In addition, our ceramic A and B substrates were selected to be used in multiple electric vehicle models with a global auto OEM. The combination of our technology and technical service capabilities were key factors in the award decisions. In data centers, a major end user selected our silicon materials to safeguard sensitive components within the server tray. The materials combined high compressibility with superior noise and vibration isolation to help enable reliable performance. Also in both AES and EMS, we secured meaningful design wins for energy storage system applications. These wins reinforce the value of our differentiated solutions and deep customer relationships.

They also support our objective of achieving sustainable growth across the core portfolio. This growth will naturally lead to expected improvement in factory utilization levels including for our ceramic business. In high growth adjacencies, the development and customer testing of our signal integrity and chip cooling solutions for data center application is continuing. We continue to see strong pace and focus from customers sampling our laminate circuit materials for high speed digital applications. Customer feedback remained positive on the performance of our materials to address rapidly emerging signal integrity challenges. Our micro channel cooler solutions provide an improved cooling technology to address rising AI chip power density.

Working with our lead customers, we have developed and tested multiple generations of prototypes with the results continuing to validate the differentiated performance of our solutions. These programs leverage capabilities where Rogers has established technical expertise and are designed to address increasingly demanding requirements in AI data centers. We completed benchmarking testing for our thermal runaway protection solution and are beginning customer sampling. This milestone moves us closer to commercializing a differentiated battery safety solution that combines our material expertise with deep application knowledge. We are also advancing our EMI shielding technology. We have identified priority customers and applications and are developing solutions tailored to their requirements with initial customer sampling targeted for early 2027.

Across these opportunities, our approach remains disciplined. We are prioritizing applications where our capabilities provide a clear customer benefit, and we are working closely with customers to advance qualification and commercialization. I will now turn it to Laura to discuss our third quarter financial performance and current quarter outlook.

Laura Russell: Thank you, Ali El-Haj, and good afternoon, everyone. As Ali mentioned, we delivered strong year over year improvement in the third quarter with higher sales across all major end markets and meaningful expansion in profitability. We also generated strong cash flow, further strengthening our balance sheet and increasing our strategic flexibility. Beginning on Slide 7, I will review our third quarter financial results. Third quarter sales were $236.1 million increasing 9% from the prior year period. Including a GBP 2.4 million benefit from foreign currency translation. EES sales increased 13.5% year over year with improvement across all end markets and particular strength in electronics and communications.

EMS sales increased 4.3% versus the prior year, driven by higher sales in the automotive and aerospace and defense end markets. Gross margin was 34.2% up 70 basis points year over year. The improvement was the result of higher volume and mix, partially offset by increases in commodity costs. Adjusted EPS was $1.39 and exceeded the high end of our guidance range. The 54% year over year increase in adjusted EPS resulted from strong sales, improved margins and favorability in the tax rate, as we continue to improve business performance across all jurisdictions. Turning to Slide 8, third quarter adjusted EBITDA increased by 28% to $47.7 million from $37.2 million in the prior year quarter.

Adjusted EBITDA margin of 20.2% of sales expanded 300 basis points to its highest level since 2020. The largest contributor to the increase was higher sales and improved product mix, which added approximately $11 million versus the prior year. Lower adjusted operating expenses also contributed to the improvement. These benefits were partially offset by higher year over year costs associated with the new Suzhou, China facility. We achieved meaningful operational improvement savings compared to the prior year, although these were offset by higher commodity costs. We continue to evaluate pricing adjustments depending on market conditions. Overall, a significant improvement in the quarter from higher volume and favorable mix together with continued discipline across our cost structure.

Continuing to Slide 9, I will discuss cash utilization for the quarter. Cash and short term investments at September 30 were $236.4 million, increasing $25 million from the end of the second quarter. Cash provided by operating activities was $41.4 million compared with CAD 24.4 million in the second quarter and free cash flow was $35.4 million The increase in cash was driven primarily by adjusted EBITDA of $47.7 million partially offset by GBP 6 million in capital expenditures. a GBP 3.6 million increase in working capital and GBP 4.6 million of cash taxes paid. We repurchased $9.3 million of shares during the quarter.

We will continue to balance returning capital to shareholders with investments in organic growth and other strategic priorities. Our strong cash position and balance sheet provides us with increased strategic flexibility as we evaluate opportunities to support long term growth and shareholder value creation. Next on Slide 10, I will discuss our guidance for the fourth quarter. From a top line perspective, we continue to see positive momentum with sales expected to increase 9% year over year at the midpoint of our guidance. Consistent with normal seasonality, and customer end-of-year operating patterns, sales are forecasted to decline sequentially. We are guiding Q4 revenues to be between $215 million and $225 million.

The guidance includes an expectation for year over year growth in aerospace and defense and industrial end markets. We are guiding gross margin in the range of 32.5% to 33.5%. The midpoint of the range is a 150 basis points higher than the prior year. We are realizing improved margins due to higher volumes and our cost structure improvement actions, although higher commodity costs will continue to be a headwind versus Q4 of 2025. We expect Q4 adjusted operating expenses to increase modestly year over year, while improving by more than 100 basis points as a percent of sales. Adjusted EPS is forecasted to range from $0.90 to $1.10.

The $1 midpoint compares to adjusted EPS of $0.89 in Q4 2025. The increase versus the prior year is a result of the expected increase in sales and gross margin partially offset by higher tax. Adjusted EBITDA is anticipated to range from $37 million to $43 million This equates to 16% increase versus the fourth quarter of 2025 at the midpoint of the range. Lastly, we project our non-GAAP full-year tax rate to be approximately 31%. In summary, our fourth quarter outlook reflects continued year over year improvement in sales, adjusted EPS and adjusted EBITDA margin as we execute our commercial and operating initiatives. I will now turn the call back over to Ali.

Ali El-Haj: Thanks, Laura Russell. In summary, we delivered strong year over year improvement in the third quarter. With growth across all end markets adjusted EBITDA margin above 20% and adjusted EPS reaching a multiyear peak. We remain focused on sustaining this financial progress while accelerating growth. Our strategy is centered on leveraging Rogers' proven capabilities and deep customer relationships to grow in core markets and advance high potential adjacent opportunities. With disciplined execution and a healthy balance sheet, we believe we are well positioned to translate these opportunities into stronger earnings and shareholder returns. That concludes our prepared remarks and I will now turn the call back to the operator for questions.

Operator: Thank you. And at this time, we will be conducting a question and answer session. Please limit yourselves to 1 question. And your first question comes from Dan Moore with CJS Securities. Please state your question.

Dan Moore: Congrats on obviously a very solid quarter, great to see top line growth high single digits, approaching 10%. Still actually a touch bit below the midpoint of the guidance. So wondering if there were areas where or pockets of sales that were maybe pushed out to some degree. Wondering if the quarter could have potentially come in even stronger, maybe talk to those areas that were not quite as strong in terms of organic growth in the quarter?

Laura Russell: I will start and then we can pass to Ali if there is any additional comments. And so, yes, you are right. It was the a slight miss at the midpoint of the guide, a couple of million dollars there. As with every quarter, we work to balance our supply, against the demand that we are seeing. And you know, with everything there are some constraints generally speaking in the market at the moment, which we knew at probably many other vendors had faced. So what I would suggest is yes, there was some push out a couple of spaces.

Then other areas where we did have supply with strong demand that we have, we worked to mitigate and manage accordingly. What I would also point to is what you can see is in the guidance for the fourth quarter, and we are seeing consistent strength in the demand in the order book. And you can see at the midpoint of the guidance there, that is also going to be up about 9% on a year over year basis. So generally speaking, yes, there were pockets of supply limitations. We work to balance it, and we are continuing to execute solid growth, you know, in the third quarter of what we posted and in our guidance at this point Q4.

Dan Moore: Now, that is really helpful, Laura. In margin, improvement even more impressive given those constraints. Maybe a follow-up for me, just elaborate really good color on the new design wins in the quarter. In terms is there anything you can say in terms of either size of the opportunities? Or timing of when you might expect some of those to start generating meaningful revenue and what a ramp looks like? Any color on those would be great. Thanks again.

Ali El-Haj: Yeah. Thanks, Dan. This is Ali. Both actually 2 of the opportunities that we have mentioned, I will they are material. So they are sizable and we expect revenue from both of these I believe, in Q2 and Q3 of 2027. 1 of them actually started in a slow ramp up. Started in q. It was started in Q4. Of this year and it will continue to ramp up. We expect to see full volumes by Q2 of next year.

Dan Moore: We will circle back with further follow ups. Thank you.

Operator: And your next question comes from David Silver with Freedom Capital Markets. Please state your question.

David Silver: Yes, good afternoon. Thank you. I did want to ask a question about margins. overall and/or margin progression overall. And you know, looking at my quarterly income statements for, let's say, the first 3 quarters now, of 2026. I am going to be a little vague here or a little imprecise. But your revenues have jumped up about 18% but your overall spending for SG&A and R&D together looks pretty flat. In other words, you have you have grown your sales while your fixed costs more or less are flat. And as a result, change in sales over change in EBITDA works out to, again, imprecise, but close to 50%.

So is this kind of the standard model or are these assumptions kind of what you are looking at as we move forward into 2027 and beyond? Or was there 1 or 2 issues that might have made the data look unusually you know, flat or you know, the numbers fell in line like they did. In other words, should we just assume flat SG&A and R&D? And maybe a 50% incremental type of EBITDA margin on incremental sales going forward? Thank you.

Laura Russell: David, let me start and we can build on my response. So I think, you know, we were. We are actually being very intentional in managing our own investments and our OpEx and in our factories and our fleet. Around service and the demand and the potential opportunities that we have in managing the investments accordingly. So the OPEX labels that we are currently posting are intentional.

There is not anything there that we are underinvested in relative to the opportunity, but what we indicated and guided when we presented at the Analyst Day last month is the fact that we will anticipate in absolute terms some growth in those investments as we achieve the significant opportunities that we believe we have exposure to both organically or primarily organically. And from the OpEx perspective. And so we will do that You started your question on the margins, please?

What we would see there is you can see as we are leveraging the fact footprint that we have in servicing our customers and region. you can see that we are benefiting from the scale and the utilization benefits through the fleet and the margin as we are balancing mix. Against that utilization. So generally speaking, yes, would say you are going to see the fall through as we can continue to execute our growth objectives. And continue to modulate and manage our investments and our investment profile aligned with our levels of confidence and security around the top line expansion.

David Silver: Okay. Great. Thank you very much for that. Next question I had maybe for Ali and thank you very much for all the qualitative color around new business wins. I was hoping to maybe just drill down a little bit more, but is it your view that the level of new business wins is sufficient to kind of meet or exceed those targets that you laid out at your recent Investor Day? In other words, the growth trajectory up to, let's say, mid 27 or so when some newer opportunities are supposed to go begin commercial sales.

But just maybe a little bit of color on whether the pace of new business wins that you cited in your remarks are consistent with what we saw, you know, a few weeks ago. Thank you.

Ali El-Haj: Thanks, David. I think the simple answer would be yes. They are consistent. As a matter of fact, we are probably ahead of schedule in wins and securing more new business And the growth that we are projecting right now is ahead of the average that we indicated. We indicated organic growth of about 5% per year during our investor day. And now we are you know, it is at about 9% in Q3, 9% in Q4. And we expect that growth to continue in 2027.

David Silver: Okay, great. Thank you. I am going to get back in queue.

Operator: Your next question comes from Rebecca Zamorski with B. Riley Securities. Please state your question.

Rebecca Zamorski: This is Rebecca on for Craig Ellis. So at the Analyst Day a few weeks ago, the team identified 3 factors that contribute to gross margins which I believe were volume and absorption, differentiated pricing and continued cost improvement. Could you update us on the progression of those 3, like, parts?

Laura Russell: Yeah. I will start, Rebecca. So, yes, you are right in terms of the 3 drivers of our gross margin expansion. So as Ali just said to David, we are seeing positive track in our design activity, and the volume. In fact, we are seeing on the designs that already won and then volume production. So that is giving us some favorable indications about, you know, the first lever of that margin expansion because it is going to be predicated on the volume that will allow us to improve our utilization through the factory.

Secondly, you have heard us talk about cost improvements that we had undertaken over the last, probably, 24 months and sizing the factories and ensuring that the factories were supplying our customers where the customer demand was. And we have concluded on those restructuring activities. So that is the $45 million you have heard of reference historically. And it is basically effectively largely done. Absent $13 million of the $45 million is not fully crystallizing in the 2026 results. But as we exit the year, it is all fully achieved.

In addition to that, we continue to focus on operational excellence initiatives to ensure that we are optimizing our yields, minimizing our input costs, and getting our maximum throughput and productivity over which those initiatives are going well. And you heard Ali say historically, that were not yet fully concluded. there is still room in there, but that remains a continued focus. From our global operations teams on a week-to-week, day-to-day basis. And then thirdly, you mentioned the pricing. We are talking about there is not pricing but differentiated pricing with the new opportunities that we are chasing. So that is key in a strategic initiative. And those programs are progressing well.

Rebecca Zamorski: Thank you. That was incredibly helpful. Well, thanks.

Operator: Thank you. And your next question comes from Dan Moore with CJS Securities. Please state your question.

Dan Moore: Maybe 1 on capital allocation. And 1 on the longer term. But cash flow, obviously, really strong. Cash continues to build despite increasing share repurchases. You expect to continue to be more aggressive in terms of buybacks at or near current levels? And in a similar vein, maybe just talk to the M&A pipeline and whether you see opportunities that could come together over the next 2, 3, 4 quarters?

Laura Russell: Yeah, Dan. So I will start again. So yes, you saw us do $9 million of share repurchases last quarter. Yes, we will be opportunistic there. We will evaluate what is in the funnel and then the current price and do what we deem appropriate for adding value to our shareholders. As we have shared in Investor Day in prior calls, we are much more active in our M&A funnel and our activities there these days. And I think Ali will probably talk about evaluation and what Yeah.

Ali El-Haj: We have a couple of opportunities, Dan, that we are looking at right now as we speak. We hopefully, you know, we anticipate some at least 1 maybe both of these opportunities are actionable within the next few quarters or so. So we are active. We are we are evaluating the things again based on the criteria that we established in investor day and continue to do that. And we expect to like I said, some actionable announcement probably within the next couple of quarters or so.

Laura Russell: Yep. In consistent with what we have said, Dan, that would be something that was strategic as capability that we do not have and that, you know, has a favorable financial contribution, at least over the mid- to long- Term. So with this and our customary appropriate diligence? Excellent.

Dan Moore: Maybe just 1 more, and this is a bigger picture kind of longer term. But just hoping to dig into a bit more on the long term goals. Looking at the 3 major opportunities, growth opportunities, data centers, battery tech, EMI shielding, Collectively, we are looking, I think, at $100 million of revenue by 2028, growing to $450 million by 2030. Just talk to your expectations regarding the relative size of each of those and how we are thinking about sort of the relative cadence of ramp.

I know it is fluid, but wondering if you could maybe delineate at all between what is sort of near term and what is, you know, larger in terms of magnitude of the opportunity over the time frame? Thank you again for all the color.

Ali El-Haj: Yeah. We will be in as you know, we will be in vague about detailing the opportunities, but clearly data center is our largest of the 3, that is for sure. And from the product standpoint of view, if you look at the 2, whether it is high speed digital or coolant, these are the 2 that are probably the largest of the data center opportunities. So data center within the 3 is the largest. High speed, and cooling will be the largest 2 opportunities within the data center itself. So without quantifying the simple in dollars, obviously, we do have detail internally here what our expectations are, and we are working towards those expectations.

Our elastomeric materials also will participate. As a matter of fact, 1 of the opportunities that we have mentioned that we already obtained the design win and we are currently launching that it is for the data center, and it is 1 of the elastomer materials that we supply today. it is 1 of our silicones here. So that is the expectation. Automotive probably would be the second within that. Within the 3. And then when it comes to EMI shielding, then obviously, that goes across all product lines including data centers. Automotive, and electronics. So from an from a timing standpoint of view, again, expectations remain the same. Second half of next year.

Towards Q3, Q4 where some of these products will launch. Again, we will go through a ramp up phase. 2028, still we are confident in the numbers that we presented at Investor Day that we will hit those numbers. And 2030, you know, our objective internally is to beat those numbers. So that gives you probably an idea about our confidence level here.

Dan Moore: Really helpful. Appreciate the color again.

Operator: Thank you. And your next question comes from David Silver with Freedom Capital Markets. Please state your question.

David Silver: Thank you very much, Dan. Touched on a couple of points. In general that I was going to follow-up on. I would like to ask Ali about maybe the tone of the tone or the optimism of your customers. In other words, I think of your company as a solutions provider, but you are still reliant on customers wanting to move forward on new investments and new platforms, etcetera. You know, just in the last few weeks, I mean, I would just say, equity markets and some high growth subsectors have been quite volatile and interest rates remain elevated compared to a couple years ago.

How would you say the engagement is with customers, you know, relative to when we last heard from you at the Investor Day. Has there been any dampening or caution incremental caution from your key, you know, customers? Or is there any change on the collaboration schedules Or from your perspective, is it still pretty much business as usual despite, let's say, the financial market volatility that a lot of those companies operate in? Thank you.

Ali El-Haj: Yes, actually thanks for the question. Actually, it is the opposite in our case here. We see the momentum is picking up. More activities are ongoing actually We see more intensity in those activities. You know, we are providing more samples Customers are building more product for testing and evaluation. As I mentioned on the prepared remarks, you know, we are on third generation, second and third generation designs. And upgrades and optimization of these products. So from a. From an activity standpoint of view, no. it is actually increasing. Which is expected as we get closer to winning those and design win announcement, you expect that those activities will increase and intensify. that is what we are seeing now.

And we are expanding actually to more customers So we do not really see a slowdown. Again, because, exactly what you said, we are providing solutions To customer needs today. They need those type of solutions and we are providing solutions. So now we do not see any impact from the macro economics that we see out there today. I think our forecast and our expectations remain the same.

David Silver: Okay. Great. I will stop there. But thank you very much for all the color. Appreciate it.

Ali El-Haj: Anytime. Thank you.

Operator: And thank you everyone for your questions. That concludes today's conference. You may disconnect your lines at this time for all of your participation.

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