Strategic Growth and Operational Efficiency

• Performance was driven by a 25% annual increase in the computing market, specifically AI server-related applications, alongside double-digit growth in automotive and industrial sectors.

• The company achieved its fourth consecutive quarter of double-digit year-over-year growth, validating its design win initiative and content expansion strategy.

• Management is prioritizing product mix improvement by focusing R&D and sales on high-margin segments like automotive, industrial, and AI-related server platforms.

• Initial gross margin improvements are being realized through favorable product mix and a focus on increasing manufacturing efficiency to minimize underloading costs.

• The strategic transition of product processing to internal fabs (GFAB and SFAB) is progressing, with key customers already qualifying products from these facilities.

• Content expansion remains a primary growth driver, with automotive addressable content increasing to $239 per vehicle and AI server content rising to 103 per unit.

Three-Year Interim Targets and Market Outlook

• Introduced a three-year interim target of $2 billion in annual revenue and 35% plus gross margin, representing a 10.5% revenue CAGR.

• The financial model anticipates significant operating leverage, targeting a 45% gross profit flow-through on every incremental dollar of revenue growth.

• First quarter 2026 guidance of $395 million reflects above-seasonal performance and a 19% year-over-year increase, signaling a robust market recovery.

• Management expects to deliver over $4 in non-GAAP EPS by the end of the three-year period, equating to a 50% CAGR from current levels.

• The company remains committed to a long-term goal of $2.5 billion in revenue with a 40% gross margin as the market continues to stabilize.

Operational Risks and Structural Transitions

• Manufacturing services agreements are expected to diminish or end this year, necessitating a shift of production to internal wafer fabs to protect margins.

• Underloading charges remain a key factor impacting gross profit percentages, though management expects these to subside as revenue volume increases.

• Supply interruptions in the broader market are being leveraged as opportunities to capture new design wins and deepen partnerships with key automotive and communication customers.

• Channel inventory has normalized to a range of 11 to 14 weeks, indicating that the previous inventory correction phase has largely concluded.

Q&A Session Highlights

Path to achieving the $2 billion interim revenue target

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