Strategic Performance Drivers

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• Revenue exceeded the top end of guidance at $16.9 million, driven by strong adoption of high-resolution video chips in the audio-video segment.

• The VS3000 chip is serving as a pillar for core audio-video growth, recently integrated into premium collaboration products by leading manufacturers like Extron.

• Automotive performance remains anchored by demand from Mercedes-Benz, while the VA7000 chipset is gaining traction through its compliance with the MIPI A-PHY standard.

• Management successfully demonstrated the first three-company interoperable SerDes connectivity solution, validating the strategic move toward open standards to eliminate vendor lock-in.

• Gross margin expansion to 62.2% was primarily influenced by a favorable product mix within the Cross-Industry Business (CIB) segment.

• The company is actively participating in MIPI's new physical AI initiatives, positioning its connectivity standards for future applications in robotics and humanoids.

Outlook and Strategic Assumptions

• Full-year 2026 revenue guidance remains unchanged at $75 million to $77 million, implying a significant step-up in performance during the second half of the year.

• Confidence in the second-half ramp is supported by high visibility into customer product launch timelines and specific design-in milestones.

• The Cross-Industry Business is projected to achieve approximately 5% growth for the full year, with acceleration expected to begin in Q2 and peak in Q4.

• A-PHY automotive projects are progressing according to schedule, with revenue contributions expected to factor into financial results starting in 2027.

• Management anticipates no material risk to meeting 2026 targets despite broader semiconductor supply chain challenges related to AI and memory demand.

Operational and Structural Updates

• CFO Guy Nathanzon will depart the company on July 13, 2026; a formal search for a successor has been initiated.

• The company maintains a robust debt-free balance sheet with $86.1 million in cash and short-term deposits to support strategic initiatives.

• Inventory levels increased slightly to $10.9 million as of March 31, 2026, to align with anticipated demand for upcoming product launches.

Q&A Session Summary

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Drivers of second-half revenue acceleration and guidance confidence

• Management reiterated that the second half of 2026 will be significantly stronger than the first half due to the timing of customer product launches.

• Confidence is derived from monitoring specific design-ins that are scheduled to hit the market in Q3 and Q4.