Q1 2026 Tower Semiconductor Ltd Earnings Call

May 13, 2026

Operator: Good day. Thank you for standing by. Welcome to the Tower Semiconductor Q1 2026 Results Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press star 11 on your telephone keypad. You will hear an automatic message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Noit Levy. Please go ahead.

Speaker #1: After the speaker's presentation, there will be the question-and-answer session. To ask a question during the session, you need to press star 11 on your telephone keypad.

Speaker #1: You want to hear an automatic message advising your hand is raised. To withdraw a question, please press star 1 and 1 again. Please be advised that today's conference is being recorded.

Speaker #1: I would now like to hand the conference over to our first speaker today, Noit Levy. Please go ahead.

Speaker #2: Thank you. Hi, everyone, and thank you for joining us. Welcome to TOWER SEMICONDUCTOR's first quarter of 2026 financial results conference call. With us today are Mr. Russell Ellwanger, our Chief Executive Officer, and Mr. Oren Shirazi, our Chief Financial Officer.

Noit Levy: Thank you. Hi, everyone, and thank you for joining us. Welcome to Tower Semiconductor's Q1 2026 financial results conference call. With us today are Mr. Russell Ellwanger, our Chief Executive Officer, and Mr. Oren Shirazi, our Chief Financial Officer. Before we begin, please note that certain statements made during today's call may be forward-looking and are subject to risks and uncertainties that could cause actual results to differ materially. These risks are detailed in our SEC filings, Form 20-F and 6-K, as well as filings with the Israeli Securities Authorities, all available on our website. Tower assumes no obligation to update any such forward-looking statements. Our Q1 2026 results are prepared in accordance with US GAAP. Some data represented may include non-GAAP financial measures as defined under SEC Regulation G.

Speaker #2: Before we begin, please note that certain statements made during today's call may be forward-looking and are subject to risks and uncertainties that could cause actual results to defer materially.

Speaker #2: These risks are detailed in our SEC filing Form 20F and 6K, as well as filings with the Israeli Securities Authorities. All available on our website.

Speaker #2: TOWER assumes no obligation to update any such forward-looking statements. Our first quarter 2026 results are prepared in accordance with US GAAP, some data presented may include non-GAAP financial measures as defined under SEC Regulation G.

Speaker #2: Reconciliation to GAAP figures and full explanations are provided in today's press release and financial tables. For your reference, a supporting slide deck is available on our website and integrated into this webcast.

Noit Levy: Reconciliation to GAAP figures and full explanations are provided in today's press release and financial tables. For your reference, a supporting slide deck is available on our website and integrated into this webcast. With that, I'd like to turn the call to our CEO, Mr. Russell Ellwanger. Russell?

Speaker #2: With that, I'd like to turn the call over to our CEO, Mr. Russell Ellwanger. Russell?

Speaker #3: Thank you, Noit. Hello, everybody. Thank you for joining our call today. The first quarter of 2026 was solid. Providing a strong foundation for the high growth we expect this year.

Russell Ellwanger: Thank you, Noit. Hello, everybody. Thank you for joining our call today. The Q1 of 2026 was solid, providing a strong foundation for the high growth we expect this year. We maintained strong financial performance with continued execution of our strategic priorities. Our Q1 2026 revenue was $414 million, 15% year-over-year growth. Q1 net profit was $65 million, 62% year-over-year growth, yielding 16% net margin up from 11% in Q1 2025. Looking ahead, we guide the Q2 of 2026 to be the highest revenue in the company's history with a mid-range revenue guidance of $455 million ±5%, representing a 22% increase as compared to the Q2 of 2025 and a 10% growth quarter-over-quarter.

Speaker #3: We maintain strong financial performance, with continued execution of our strategic priorities. Our first quarter 2026 revenue was $414 million, 15% year-over-year growth. First quarter net profit was $65 million, 62% year-over-year growth, yielding 16% net margin, up from 11% in the first quarter of 2025.

Speaker #3: Looking ahead, we guide the second quarter of 2026 to be the highest revenue in the company's history, with a mid-range revenue guidance of $455 million, plus or minus 5%, representing a 22% increase as compared to the second quarter of 2025, and a 10% growth quarter over quarter.

Speaker #3: We strongly reiterate our target of quarter-over-quarter revenue and margin growth throughout 2026. We continue to strengthen our alignment and partnerships with our photonics customers, through the execution of long-term customer commitments, contractually representing $1.3 billion revenue in 2027, with significantly larger-valued contracts for 2028, backed by approximately $290 million in prepayments already received from our largest SIPHO customers.

Russell Ellwanger: We strongly reiterate our target of quarter over quarter revenue and margin growth throughout 2026. We continue to strengthen our alignment and partnerships with our photonics customers through the execution of long-term customer commitments, contractually representing $1.3 billion revenue in 2027 with significantly larger valued contracts for 2028, backed by approximately $290 million in prepayments already received from our largest SiPho customers. This reflects the strength of our offerings and our customer partners' confidence in our ability to meet the continued growing demands of next generation AI data center architectures. Importantly, these reservations do not represent the entire express demand of these customers, nor the extent of our planned shipment to these customers and do not include additional wafer shipments to our broader base of more than 50 active SiPho customers serving various end market applications.

Speaker #3: This reflects the strength of our offerings, and our customer partners' confidence in our ability to meet the continued growing demands of next-generation AI, data center architectures.

Speaker #3: Importantly, these reservations do not represent the entire express demand of these customers, nor the extent of our planned shipment to these customers, and do not include additional wafer shipments to our broader base of more than 50 active SIPHO customers serving various and market applications.

Speaker #3: These commitments together with our continued technology leadership and strategic expansion of $300 millimeter and global manufacturing capacity provide us with enhanced revenue visibility and confidence in sustained profitable growth.

Russell Ellwanger: These commitments, together with our continued technology leadership and strategic expansion of 300 millimeter and global manufacturing capacity, provide us with enhanced revenue visibility and confidence in sustained profitable growth. Our recently announced restructuring deal in Japan and TPSCo marks a significant milestone in advancing our long-term 300 millimeter strategy. By transitioning to full ownership of the 300 millimeter factory Fab 7 in Uozu, we are creating a more focused and scalable platform to support growing customer demand, particularly in our differentiated optical photonics technologies. Full ownership allows us to expand and build upon a facility that is running multiple fully qualified high volume application flows, and importantly, at present volumes is already profitable. The 300 millimeter expansion, tied to the approval of many grants, is designed to be strategic, operational, and capital efficient.

Speaker #3: Our recently announced restructuring deal in Japan in TPSCO marks a significant milestone in advancing our long-term $300 millimeter strategy. By transitioning to full ownership of the $300 millimeter factory Fab 7 in Uzu we are creating a more focused and scalable platform to support growing customer demand.

Speaker #3: Particularly, in our differentiated optical photonics technologies. Full ownership allows us to expand and build upon a facility that is running multiple fully qualified high-volume application flows and, importantly, at present volumes is already profitable.

Speaker #3: The $300 millimeter expansion tied to the approval of MediGrants is designed to be strategic, operational, and capital efficient. With access to adjacent land we expect to further build out and scale up to four times current levels generating a meaningful long-term growth engine anchored in high-value technologies.

Russell Ellwanger: With access to adjacent land, we expect to further build out and scale up to four times current levels, generating a meaningful long-term growth engine anchored in high-value technologies. This approach leverages existing customer qualifications with increasing demand, allowing incremental capacity to translate into revenue and cash flow almost immediately as new tools are installed. This positions our 300 millimeter platforms not only as a key driver of future growth. Also as a structurally stronger contributor to profitability, reinforcing our overall financial model and long-term value creation. Additionally, we are entering into a long-term supply agreement with Nuvoton for Fab Five Tonami. This will ensure manufacturing continuity for our 200 millimeter customers under terms that are mutually beneficial.

Speaker #3: This approach leverages existing customer qualifications with increasing demand allowing incremental capacity to translate into revenue and cash flow almost immediately as new tools are installed.

Speaker #3: This positions our $300 millimeter platforms not only as a key driver of future growth but also as a structurally stronger contributor to profitability. Reinforcing our overall financial model and long-term value creation.

Speaker #3: Additionally, we are venting into a long-term supply agreement with Nuviton for Fab 5 tsunami this will ensure a manufacturing continuity for our $200 millimeter customers under terms that are mutually beneficial.

Speaker #3: Moving specifically to first quarter of 2026 performance this year has begun in a very strong fashion led by silicon photonics with a revenue growth of 3X year-over-year all major technology offerings demonstrated year-over-year growth with images of 9%, RFSOI of 12%, power management of 10%, and silicon germanium of 24% year-over-year.

Russell Ellwanger: Moving specifically to Q1 2026 performance, this year has begun in a very strong fashion, led by silicon photonics with a revenue growth of 3x year-over-year. All major technology offerings demonstrated year-over-year growth with imagers up 9%, RF SOI up 12%, power management up 10%, and silicon germanium up 24% year-over-year. Please see slide 4 as reference for Q1 revenue breakdown by technology. Focusing on RF infrastructure, last quarter was truly amazing, both in our team's execution of aggressive capacity expansion, as well as in demonstrating new breakthrough technology milestones. First, we continued a strong ramp of 200 Gb per second products for multiple customers while continuing to support strong demand in older products by taking full advantage of new capacity coming online.

Speaker #3: Please see slide 4 as reference for Q1 revenue breakdown by technology. Focusing on our RF infrastructure last quarter was truly amazing both in our team's execution of aggressive capacity expansion as well as in demonstrating new breakthrough technology milestones.

Speaker #3: First, we continue to strong wrap of 200 gigabit per second products for multiple customers while continuing to support strong demand in older products by taking full advantage of new capacity coming online.

Speaker #3: We are in the midst of a SIPHO production ramp in each of Fab 2 Migdalhemic, Fab 3 Newport Beach, Fab 9 San Antonio, and Fab 7 Uzo, Japan, 300 millimeter.

Russell Ellwanger: We are in the midst of a SiPho production ramp in each of Fab 2 Migdal HaEmek, Fab 3 Newport Beach, Fab 9 San Antonio, and Fab 7 Uozu, Japan, 300 millimeter. Among this, we successfully achieved in Q1 first flow SiPho revenue shipments from both Fab 2 and Fab 7, the latter having achieved impressive 95% yield for the first SiPho wafers leaving the factory. Our expansion remains on track to grow SiPho capacity 5 times from the base of our Q4 2025 wafer revenue shipments by the end of this year, 2026. In 2027, we anticipate our focus will turn primarily to additional 300 millimeter capacity expansion in the Uozu factory, supported by the expected full factory ownership. Next, we achieved a number of next generation technology breakthroughs working with several of our key customers.

Speaker #3: Among this we successfully achieved in Q1 first flow SIPHO revenue shipments from both Fab 2 and Fab 7 the latter having achieved impressive 95% yield for the first SIPHO wafers leaving the factory.

Speaker #3: Our expansion remains on track to grow SIPHO capacity five times from the base of our Q4 25 wafer revenue shipments by the end of this year 2026.

Speaker #3: In 2027 we anticipate our focus will turn primarily to additional $300 millimeter capacity expansion in the Wozo factory supported by the expected full factory ownership.

Speaker #3: Next we achieved a number of next-generation technology breakthroughs working with several of our key customers. This quarter we announced the demonstration of an all-silicon 400 gigabit per lane MOX sender modulator with our strong partner and optical industry leader Coherent.

Russell Ellwanger: This quarter, we announced the demonstration of an all-silicon, 400 gigabit per lane Mach-Zehnder modulator with our strong partner and optical industry leader, Coherent. Coherent being one of our customers having signed a high volume, long-term contract. With OpenLight, we recently announced a heterogeneously integrated 400 gigabit per lane indium phosphide electro-absorption modulator on our silicon PH18DA platform. In addition, we made strong strides towards bringing thin-film lithium niobate to high volume manufacturing and announced our partnerships with Lightwave Logic and NLM Photonics to bring organic polymers to high volume production for next generation compact modulators.

Speaker #3: Coherent being one of our customers having signed a high-volume long-term contract. With OpenLight we recently announced a heterogeneously integrated 400 gigabit per lane indium phosphide electroabsorption modulator on our silicon PH18DA platform.

Speaker #3: In addition we made strong strides towards bringing thin-film lithium niobate to high-volume manufacturing and announced our partnerships with Lightwave Logic and NLM Photonics to bring organic polymers to high-volume production for next-generation compact modulators.

Speaker #3: Just prior to the optical fiber conference we announced our partnerships with Salliance Labs and Oriole Networks to manufacture advanced silicon photonics-based optical circuit switches both using our PH18DA platform with heterogeneous integrated indium phosphide optical amplifiers to achieve high bandwidth and ultra-low latency optical switch solutions for AI data center scaling.

Russell Ellwanger: Just prior to the Optical Fiber Conference, we announced our partnerships with Salience Labs and Oriole Networks to manufacture advanced silicon photonics-based optical circuit switches, both using our PH18DA platform with heterogeneous integrated indium phosphide optical amplifiers to achieve high bandwidth and ultra-low latency optical switch solutions for AI data center scaling. Last, but certainly not least, our partner, Scintil Photonics, announced availability of the world's first heterogeneous integrated dense wavelength division multiplexer, DWDM laser sources designed for near package optics and CPO-based AI infrastructures. Most market analysts forecast that pluggable optical transceivers will remain the dominant format through the end of this decade.

Speaker #3: Last but certainly not least our partner Centell Photonics announced availability of the world's first heterogeneous integrated dense wavelength division multiplier DWDM laser sources designed for near package optics and CPO-based AI infrastructures.

Speaker #3: Most market analysts forecast that pluggable optical transceivers will remain the dominant format through the end of this decade. We do see extra dense pluggable optics XPO being led by Arista with the aim to extend the serve generations of pluggables and highlighted by Andy Beckelsheim in his optical fiber conference executive forum panel presentation.

Russell Ellwanger: We do see extra dense pluggable optics, XPO, being led by Arista with the aim to extend the served generations of pluggables and highlighted by Andy Bechtolsheim in his Optical Fiber Conference Executive Forum panel presentation and near package optics, eventually also co-package optics, emerging and coexisting with pluggables for the next several years and are thus preparing to wrap these technologies as well. At this year's OFC, Tower Silicon Photonics was on display in leading XPO and near package optics demonstrations. We are already seeing strong demand for NPO products in 2027. Given this strong customer traction, it's our expectation that Tower SiPho will continue to lead in these new optical form factors. NPO is likely to ramp over the next several years and precede a significant ramp in CPO for our primary customers.

Speaker #3: And near package optics eventually also co-package optics emerging and coexisting with pluggables for the next several years and are thus preparing to ramp these technologies as well.

Speaker #3: At this year's OFC Tower Silicon Photonics was on display in leading XPO and near package optics demonstrations. We are already seeing strong demand for MPO products in 2027.

Speaker #3: Given this strong customer traction it's our expectation that Tower SIPHO will continue to lead in these new optical form factors. MPO is likely to ramp over the next several years and precede a significant ramp in CPO for our primary customers.

Speaker #3: However we are investing heavily in several CPO technologies namely in-house 200 millimeter and 300 millimeter hybrid bonding with through silicon vias to seamlessly attach SIPHO to electrical ICs laser sources for both more traditional as well as DWDM architectures for use in CPO implementations and reduce size high-performance modulators for use in space challenged CPO form factors.

Russell Ellwanger: However, we are investing heavily in several CPO technologies, namely in-house 200mm and 300mm hybrid bonding with through-silicon vias to seamlessly attach SiPho to electrical ICs, laser sources for both more traditional as well as DWDM architectures for use in CPO implementations, and reduced size, high performance modulators for use in space-challenged CPO form factors. In addition to SiPho, our silicon germanium platform is experiencing unprecedented demand for use in drivers and transimpedance amplifiers for optical transceivers, and also for active copper cables that can be an attractive alternative to optical for short distance scale-up architecture. Our RF silicon germanium technology is in the midst of a strong ramp for LNAs in a tier 1 mobile platform. In silicon germanium, we recently announced our partnership to produce high-power US-made silicon germanium beamforming ICs designed for defense radar and satellite communication applications.

Speaker #3: In addition to SIPHO our silicon germanium platform is experiencing unprecedented demand for use in drivers and transimpedance amplifiers for optical transceivers and also for active copper cables that can be an attractive alternative to optical for architecture.

Speaker #3: Additionally, our RF silicon germanium technology is in the midst of a strong ramp for LNAs in a Tier 1 mobile platform. In silicon germanium, we recently announced our partnership to produce high-power, US-made silicon germanium beam-forming ICs designed for defense radar and satellite communication applications.

Speaker #3: Fabricated at our US sites these chips aim to secure domestic supply chains offering superior performance for critical next-generation defense systems. As our sites turn to space whether for data centers or for global satellite connectivity we see our silicon germanium platform being well-suited to support these growing applications.

Russell Ellwanger: Fabricated at our US sites, these chips aim to secure domestic supply chains, offering superior performance for critical next-generation defense systems. As our sites turn to space, whether for data centers or for global satellite connectivity, we see our silicon germanium platform being well suited to support these growing applications. Looking at RF mobile, we continue to move our RF SOI 200mm technologies to 300mm to take advantage of finer line and other enhanced capabilities offered at 300mm, whilst repurposing this 200mm capacity for higher margin SiPho and SiGe capabilities. Substantial improvements of our on/off relative to competitors and reduced layer count is creating a strong design win momentum that positions our 300mm RF SOI platform for sustained growth over the next multiple years.

Speaker #3: Looking at RF Mobile we continue to move our RFSOI 200 millimeter technologies to 300 millimeter to take advantage of finer line and other enhanced capabilities offered at 300 millimeter.

Speaker #3: Whilst repurposing this 200-millimeter capacity for higher-margin SIPHO and SIG capabilities, substantial improvements of RONCOF relative to competitors and reduced layer count is creating a strong design wind momentum that positions our 300-millimeter RFSOI platform for sustained growth over the next multiple years.

Speaker #3: In power management, we have seen year-to-year revenue growth in both our 200-millimeter and 300-millimeter BCD offerings. In the last quarter, we announced the release of our latest power platform, Gen 3, achieving on-resistance below 1.5 milliohm-millimeter squared for key devices with operating voltages above 10 volts.

Russell Ellwanger: In power management, we have seen year-to-year revenue growth in both our 200 millimeter and 300 millimeter BCD offerings. In the last quarter, we announced the release of our latest power platform, Gen3, achieving on-resistance below 1.5 milliohm millimeter squared for key devices with operating voltages above 10 volts. Such low on-resistance enable high power conversion efficiency in a variety of applications and places our offering at a very competitive position relative to other foundry offerings. Using our technology, our lead customers have demonstrated a 15% reduction in power conversion losses, quite significant as compared to the highest efficiency alternatives. Some of the end markets where we have seen revenue growth have included consumer mobile and automotive.

Speaker #3: Such low on-resistance enable high power conversion efficiency in a variety of applications and places our offering at a very competitive position relative to other foundry offerings.

Speaker #3: Using our technology our lead customers have demonstrated a 15% reduction in power conversion losses quite significant as compared to the highest efficiency alternatives. Some of the end markets where we have seen revenue growth have included consumer mobile and automotive in addition as the AI data center power delivery market transitioned to 800 volts DC bus at the rack level we see a significant growth opportunity ahead in smart power stages and point-of-load converters designed with our BCD offerings.

Russell Ellwanger: In addition, as the AI data center power delivery market transitions to 800V DC bus at the rack level, we see a significant growth opportunity ahead in smart power stages and point of load converters designed with our BCD offerings. Lastly, in consideration of the value we are offering, our 200 millimeter BCD pricing has increased by 13%. Image sensors. The fastest-growing CIS segments are automotive, industrial, machine vision, and high-end video cameras. Growth in each of these areas is concentrated in the high-end portion, where high resolution, high dynamic range with sensitivity to low light, and global shutter technology are required. Tower's global shutter technology, combined with its wafer-to-wafer hybrid bonding, provides best-in-class performance in terms of low noise and high sensitivity and allows high resolution. Additionally, we're developing an ultra-high density in-pixel capacitor to provide best-in-class dynamic range, especially for the automotive market.

Speaker #3: Lastly in consideration of the value we are offering our 200 millimeter BCD pricing has increased by 13%. Image sensors the fastest growing CIS segments are automotive industrial machine vision and high-end video cameras.

Speaker #3: Growth in each of these areas is concentrated in the high-end portion where high resolution high dynamic range with sensitivity to low light and global shutter technology are required.

Speaker #3: Tower's global shutter technology combined with its wafer-to-wafer hybrid bonding provides best-in-class performance in terms of low noise and high sensitivity and allows high resolution.

Speaker #3: Additionally we're developing an ultra-high-density in-pixel capacitor to provide best-in-class dynamic range especially for the automotive market. We won a second high-performance automotive product this past quarter.

Russell Ellwanger: We won a second high-performance automotive product this past quarter. Significantly, we are fully qualified with the next generation high-end video sensor with a leading high-end photography camera maker awaiting their product launch. Turning to utilization. For the first quarter, utilization rates were Fab 2 at around 60% utilization as SiPho and SiGe qualifications continue. Fab 3 operated at 80% utilization. Utilization was slightly constrained due to adding newer SiPho and SiGe processes. We expect utilization and output to increase back in the second quarter. Fab 5 was at 75% utilization. Fab 7 continues to be fully utilized, well above our 85% utilization model. Fab 9 utilization was at 80%. With that, I'd now like to turn the call over to our CFO, Mr. Oren Shirazi. Oren, please.

Speaker #3: Significantly we are fully qualified with the next generation high-end video sensor with a leading high-end photography camera maker awaiting their product launch. Turning to utilization for the first quarter utilization rates were FAP 2 at around 60% utilization at SIPHO and SIG qualifications continue.

Speaker #3: FAP 3 operated at 80% utilization utilization was slightly constrained due to adding newer SIPHO and SIG processes we expect utilization and output to increase back in the second quarter.

Speaker #3: FAP 5 was at 75% utilization. FAP 7 continues to be fully utilized, well above our 85% utilization model. FAP 9 utilization was at 80%.

Speaker #3: With that I'd now like to turn the call over to our CFO Mr. Oren Shirazi. Oren please.

Speaker #2: Thank you Rossa. Hello everyone. Earlier today we released our financial results for the first quarter of 2026. I will now review the highlights of these results as well as the balance sheet and CAPEX investments.

Oren Shirazi: Thank you, Russell. Hello, everyone. Earlier today, we released our financial results for Q1 2026. I will now review the highlights of these results, as well as the balance sheet and CapEx investments. Looking into the P&L, revenue for Q1 2026 was $414 million, representing 15% year-over-year growth compared to $358 million in Q1 2025. Gross profit for Q1 2026 was $111 million, an increase of 52% compared to Q1 2025, and operating profit was $65 million, 96% higher year-over-year.

Speaker #2: Looking into the P&L, revenue for the first quarter of 2026 was $414 million, representing 15% year-over-year growth compared to $358 million in the first quarter of 2025.

Speaker #2: Gross profit for the first quarter of 2026 was $111 million an increase of 52% compared to the first quarter of 2025 and operating profit was $65 million 96% higher year-over-year.

Speaker #2: Income tax expense line of $6.5 million in the P&L reflects an all-in 9% effective tax rate which is better compared to our model per which we estimate all-in tax rates to be above 15% following Pillar 2 regulations.

Oren Shirazi: Income tax expense line of $6.5 million in the P&L reflects an all-in 9% effective tax rate, which is better compared to our model, by which we estimate all-in tax rates to be above 15% following Pillar Two regulations. The reason for it is the inclusion of a non-recurring income tax benefit recorded for the Q1 of 2026 in relation to TPSCo, our Japanese affiliate. Net profit for the Q1 of 2026 was $65 million, an increase of 62% or $25 million compared to net profit of $40 million in the Q1 of 2025, reflecting 16% net margins compared to 11% net margins for the Q1 of 2025.

Speaker #2: The reason for it is the inclusion of a non-recurring income tax benefit recorded for the first quarter of 2026 in relation to TPSCO our Japanese affiliate.

Speaker #2: Net profit for the first quarter of 2026 was $65 million an increase of 62% or 25 million compared to net profit of $40 million in the first quarter of 2025 reflecting 16% net margins compared to 11% net margins for the first quarter of 2025.

Speaker #2: Earnings per share for the first quarter of 2026 were $58 cents basic and $57 cents diluted which is 61% and 63% higher year-over-year respectively.

Oren Shirazi: Earnings per share for Q1 2026 were $0.58 basic and $0.57 diluted, which is 61% and 63% higher year-over-year, respectively. We received $290 million of SiPh customer prepayments towards 2027 capacity reservation. These customer prepayments are included in the balance sheet as of the end of March 2026 as short and long-term customer advances and are included in the cash flow report for Q1 2026 as cash from operating activities. Continuing on the balance sheet, our balance sheet continues to be strong, evidenced by the following indicators and financial ratios. As of the end of March 2026, our assets totaled $3.7 billion, primarily comprised of $1.5 billion in fixed assets net, predominantly comprised of fab machinery, and $2 billion of current assets.

Speaker #2: As we announced we received $290 million of SIPHO customer prepayments towards 2027 capacity reservation. These customer prepayments are included in the balance sheet as of the end of March 2026 as short and long-term customer advances and are included in the cash flow reports for Q1 26 cash from operating activities.

Speaker #2: Continuing on the balance sheet our balance sheet continues to be strong evidenced by the following indicators and financial ratios. As of the end of March 2026 our assets totaled $3.7 billion primarily comprised of $1.5 billion in fixed assets net predominantly comprised of FEB machinery.

Speaker #2: And $2 billion of current assets. Current assets ratio is very strong at about 5.6x while shareholders' equity reached a record of $3 billion at the end of March 2026.

Oren Shirazi: Current assets ratio is very strong at about 5.6x, while shareholders' equity reached a record of $3 billion at the end of March 2026. Additional evidence of the strong balance sheet and financial position is the S&P Global Ratings Maalot and S&P Global rating fully owned company, which on 5 May 2026, completed its annual rating review for the company, reaffirming its ilAA rating and raising its outlook for the company from a stable outlook to a positive outlook. I would like now to describe our hedging activities. In relation to the Japanese yen, since the majority of TPS Co.'s revenue is denominated in yen, and the vast majority of TPS Co.'s costs are in yen, we have a natural hedge over most of our Japanese business and operations.

Speaker #2: Additional evidence of the strong balance sheet and financial position is the standard and pooled MALOT an S&P global rating fully owned company which on May 5 2026 completed its annual rating review for the company reaffirming its ILAA rating and raising its outlook for the company from a stable outlook to a positive outlook.

Speaker #2: I would like now to describe our hedging activities. In relation to the Japanese yen since the majority of TPSCO's revenue is denominated in yen and the vast majority of TPSCO's costs are in yen we have a natural hedge over most of our Japanese business and operations.

Speaker #2: To mitigate part of the remaining yen exposure we are executing zero-cost cylinder transactions to hedge currency fluctuations. Hence while the yen rate against the US dollar may fluctuate there is limited impact on our margins.

Oren Shirazi: To mitigate part of the remaining yen exposure, we are executing zero-cost collar transactions to hedge currency fluctuations. While the yen rate against the US dollar may fluctuate, there is limited impact on our margins. In relation to the Israeli shekel currency, while we have no revenue in this currency, since a portion of our cost in Israel is denominated in shekels, we also hedge a large portion of such currency risk by engaging zero-cost collar transactions to mitigate this exposure. While the Israeli currency rate against the US dollar may fluctuate, there is a limited impact on our margins, as indeed we have experienced over the past few quarters, in which period the Israeli currency appreciated strongly compared to the US dollar. Moving into the CapEx investment plan.

Speaker #2: In relation to the Israeli shekel currency while we have no revenue in this currency since a portion of our cost in Israel is denominated in shekel we also hedge a large portion of such currency risk by engaging zero-cost cylinder transactions to mitigate this exposure.

Speaker #2: Hence, while the Israeli currency rate against the US dollar may fluctuate, there is a limited impact on our margins, as indeed we have experienced over the past few quarters, in which period the Israeli currency appreciated strongly compared to the US dollar.

Speaker #2: Now, moving into the CAPEX investment plan. As we announced in recent quarters, in order to support the increasing SIPHO and SIG demand, we are executing a $920 million investment plan in capacity and capability of SIG and SIPHO in our eight-inch fabs in Israel, Newport Beach, Texas, and also in our twelve-inch Uozu fab in Japan.

Oren Shirazi: As we announced in recent quarters, in order to support the increasing SiPh and SiGe demand, we are executing a $920 million investment plan in capacity and capability of SiGe and SiPh in our 8-inch fabs in Israel, Newport Beach, Texas, and also in our 12-inch Uozu Fab in Japan. This investment is on track in terms of purchase orders issued, technology and process qualification, and the ramp plan. Approximately 40% of the above-mentioned $920 million CapEx has already been paid and is included in our cash flow for investing activities for past reported periods. The remaining 60% are expected to be paid throughout 2026 and 2027. All these CapEx current and future investments are fully reflected in the model we presented in February 2026.

Speaker #2: This investment is on track in terms of purchase orders issued technology and process qualification and the REM plan. Approximately 40% of the above-mentioned $920 million CAPEX has already been paid and is included in our cash flow for investing activities for past reported periods.

Speaker #2: While the remaining 60% are expected to be paid throughout 2026 and 2027. All these CAPEX current and future investments are fully reflected in the model we presented in February 2026 under this model we target $2.8 billion in annual revenue $1.12 billion in annual gross profits $900 million in annual operating profits and $750 million in annual net profits.

Oren Shirazi: Under this model, we target $2.8 billion in annual revenue, $1.12 billion in annual gross profits, $900 million in annual operating profits, and $750 million in annual net profits. That concludes my prepared remarks. Now I'd like to turn the call back to the operator so we can take your questions. Operator?

Speaker #2: That concludes my prepared remarks. Now I'd like to turn the call back to the operators so we can take your questions. Operator?

Speaker #1: Thank you dear participants. As a reminder if you wish to ask a question please press star 11 on your cell phone keypad and wait for an M to be announced.

Operator: Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star one and one again. Please stand by while compile the Q&A roster. This will take a few moments. Now we're going to take our first question. It comes to line of Mehdi Hosseini from Susquehanna Financial Group. Your line is open. Please ask your question.

Speaker #1: To withdraw a question please press star 111 again. Wrist and bell will compile the Q&A roster. This will take a few moments. And now we're going to take our first question.

Speaker #1: And it comes to land of Mehdi Hosseini from Susquehanna Financial Group. Your line is open. Please ask a question.

Speaker #3: Yes. Thanks for taking my question. A couple for me. Russell if you just think about the big picture and the longer-term trends is there any way you can help us understand how opportunities for Tower as it relates to silicon photonic and silicon germanium changes as we migrate from pluggable transceiver to optical?

Mehdi Hosseini: Yes. Thanks for taking my question. A couple for me. Russell, if you just think about the big picture and longer term trends, is there any way you can help us understand how opportunities for Tower as it relates to silicon photonic and silicon germanium changes as we migrate from a pluggable transceiver to optical? In other words, how does your content change as you make this transition from a traditional pluggable transceiver to optical?

Speaker #3: In other words how does your content change as you make this transition from a traditional pluggable transceiver to optical?

Russell Ellwanger: As stated, as we go forward, as far as content itself, certainly you'll still need lasers. We're driving integrated lasers. We're driving different material modulators for higher speeds and as well driving, as I had mentioned, through-silicon via to be able to do some 3D packaging and tie the silicon photonics to the electrical ICs. As far as XPO, there's just many more channels that are being done. As far as MPO, again, many more channels being done, so, greater modulation.

Speaker #2: As stated as we go forward as far as content itself I mean certainly you'll still need lasers. We're driving integrated lasers. We're driving different material modulators for higher speeds.

Speaker #2: And as well driving as I had mentioned through silicon via to be able to do some 3D packaging and tie the silicon photonics to the electrical ICs.

Speaker #2: As far as XPO there's just many more channels that are being done and as far as MPO again many more channels being done. So greater modulation.

Speaker #3: Sure. I asked the question because the way we in investment community see the optical transceiver manufacturing evolving there are several different solutions by different foundries and I was just trying to understand if Tower has become a leading foundry a partner for transceiver manufacturing for pluggable.

Mehdi Hosseini: Sure. I ask the question because the way we in the investment community see the optical transceiver manufacturing evolving, there are several different solutions by different foundries. I was just trying to understand if Tower has become a leading foundry, a partner for transceiver manufacturing for pluggable. How does that change as we move into optical, where there are alternative technologies?

Speaker #3: How does that change as we move into optical, where there are alternative technologies?

Speaker #2: As stated we expect that what we have with pluggables will transfer nicely into NPO. And we'll extend as well into CPO. Which will be several years down the road.

Russell Ellwanger: As stated, we expect that what we have with pluggables will transfer nicely into NPO and will extend as well into CPO, which will be several years down the road. If you look at the SiPho ports itself, it's very interesting. From 2025, the amount of SiPho ports, and this is according to a report by LightCounting, the amount of SiPho ports was 30 million, driving to 2028 SiPho ports to 137 million. At the same time, the total ports goes from 90 million to 205. This is, you know, a function of the data center, build-up, build-out, et cetera. The amount of ports becomes much, much greater. Pluggables are not going away at all. Pluggables will stay extremely strong, at least through 2030.

Speaker #2: If you look at the SIPHO ports itself it's very interesting. From 2025 the amount of SIPHO ports and this is according to report by light counting the amount of SIPHO ports was 30 million.

Speaker #2: Driving to 2028 SIPHO ports to 137 million. Now at the same time the total ports goes from 90 million to 205. So this is a function of the data center build-up build-out etc.

Speaker #2: But the amount of ports becomes much much greater. Pluggables are not going away at all. Pluggables will stay extremely strong at least through the 2030.

Speaker #2: As stated in the script we expect that the first things to come on at a higher rate is the near package optics. Where we have multiple design wins presently and stated that we have reasonable volume that will be shipping in 2026 2027.

Russell Ellwanger: As stated in the script, we expect that the first things to come on at a higher rate is the near package optics, where we have multiple design wins presently and stated that we have a reasonable volume that will be shipping in 2026, 2027. We have as well, I think a very strong position in the XPO that was highlighted by Andy at the OFC, as I mentioned, having had two strong demonstrators at OFC using our SiPho. If you just look again, the growth of SiPho ports is 4.5x from 25 to 28, and that entire amount of port growth is added from 28 to 2030. A lot of room for tremendous amount of SiPho growth. We are, I believe, by far the leader in pluggables.

Speaker #2: And we have as well I think a very very strong position in the XPO that was highlighted by Andy at the OSC as I'd mentioned.

Speaker #2: Having had two strong demonstrators at OSC using our SIPHO. So if you just look again the growth of SIPHO ports is 4.5X from 25 to 28.

Speaker #2: And that entire amount of port growth is added from 28 to 2030. So a lot of room for tremendous amount of SIPHO growth. We are I believe by far the leader in pluggables.

Speaker #2: I don't see any reason that that should change. And in the short term the XPO and the MPO form factors should transition nicely with Tower maintaining leadership.

Russell Ellwanger: I don't see any reason that that should change. In the short term, the XPO and the MPO form factors should transition nicely with Tower maintaining leadership.

Speaker #3: Great. Thanks for the details. And just a quick follow-up. I understand investment communities focused on silicon photonic and thank you for identifying revenue opportunities especially what you have contracted for 2027.

Mehdi Hosseini: Great. Thanks for the details. Just a quick follow-up. I understand investment community is focused on silicon photonics, and thank you for identifying revenue opportunities, especially what you have contracted for 2027. Is there any way to think about the ratio between SiPho and silicon germanium? Because silicon germanium is also used in transceiver. If you have extended visibility on the SiPho, would that gives you a visibility on the SiGe, and is there a ratio that we could use to understand opportunities that you have focusing on SiGe?

Speaker #3: Is there any way to think about the ratio between SIPHO and silicon germanium? Because silicon germanium is also used in transceiver. So if you have extended visibility on the SIPHO would that give you a visibility on the SEGI?

Speaker #3: And is there a ratio that we could use to understand opportunities that you have focusing on SEGI?

Speaker #2: Yeah. You're correct. It's very much hand in hand. So as the ports increase and the movement to SIPHO increases that obviously the SIPHO grows.

Russell Ellwanger: Yeah, you're correct. It's very much hand in hand. As the ports increase and the movement to SiPho increases, that obviously the SiPho grows. As the ports increase as well, the need for TIAs and drivers increases pretty much at the same ratio. The difference between the two comes into the advancement of the SiPho technology and the fact that although they both demand very good margins, SiPho is demanding a higher margin than the SiGe. The SiGe revenue growth is lower than the SiPho revenue growth. As far as the amount of units, they pretty much go hand in hand.

Speaker #2: As the ports increase as well the need for TIAs and drivers increases pretty much at the same ratio. The difference between the two comes into the advancement of the SIPHO technology.

Speaker #2: And the fact that although they both demand very good margins SIPHO is demanding a higher margin than the SIGI. So the SIGI revenue growth is lower than the SIPHO revenue growth.

Speaker #2: But as far as the amount of units they pretty much go hand in hand.

Speaker #3: Got it. Thank you. I'll go back into the queue.

Mehdi Hosseini: Got it. Thank you. I'll go back into the queue.

Speaker #1: Thank you. Now we're going to take our next question. And the question comes line of Kodi Akri from Benchmark. Your line is open. Please ask your question.

Operator: Thank you. Now we're gonna take our next question. The question comes line of Cody Acree from Benchmark. Your line is open. Please ask your question.

Speaker #2: Hey Kodi.

Russell Ellwanger: Hey, Cody.

Cody Acree: Yeah, thanks, guys. Hey, guys. Thanks for taking my questions and congrats on just a stellar quarter and guidance. Russell, could you just get a quick clarification on the $1.3 billion commitment? Excuse me. Is that for wafers to be delivered in fiscal 2027, or is that wafers started that then would extend delivery to 2028? Just trying to get my model correct.

Speaker #4: Yeah. Thanks guys. Hey guys. Thanks for taking my questions. And congrats on just a stellar quarter in guidance. Russell maybe could you just get a quick clarification on the 1.3 million billion commitment excuse me.

Speaker #4: Is that for wafers to be delivered in fiscal 27? Or is that wafer started that then would extend delivery into 28? Just trying to get my model correct.

Speaker #2: Wafers delivered? In 27? And the what I stated about a higher volume for 28 is wafers delivered in 28. But again and I think it's very important to note although I did say it in the script the 1.3 billion is a contractual commitment.

Russell Ellwanger: Wafers delivered in 2027. What I stated about a higher volume for 2028 is wafers delivered in 2028. Again, I think it's very important to note, although I did say it in the script, the $1.3 billion is a contractual commitment. It is not, even with those customers that we have that contractual commitment from and with, it is not their full volume demand. So the $1.3 billion, if you look at it, what were we in 2025? I think somewhere about $230 million. It's a two-year from $230 million to $1.3 billion. That $1.3 billion is not what we're forecasting for SiPho in 2027.

Speaker #2: It is not even with those customers that we have that contractual commitment from and with. It is not their full volume demand. So the 1.3 billion if you look at it what were we in 2025 I think somewhere about 230 million dollars?

Speaker #2: So it's a two year from a 230 to a 1.3 billion. But that 1.3 is not what we're forecasting for SIPHO in 2027.

Cody Acree: Well.

Speaker #4: Well I guess.

Russell Ellwanger: Meaning we're forecasting substantially higher. Yes.

Russell Ellwanger: Meaning we're forecasting substantially higher. Yes. To answer your question directly, that is for wafer shipments.

Speaker #2: We're forecasting substantially higher. But yes. To answer your question directly that is for wafer shipments.

Cody Acree: Well-

Russell Ellwanger: To answer your question directly, that is for wafer shipments.

Speaker #4: I guess that then just begs the next question. With that level of visibility, what degree of visibility would you have to have to feel comfortable increasing your recently increased long-term model?

Cody Acree: I guess that then just begs the next question. With that level of visibility, what degree of visibility would you have to have to feel comfortable increasing your recently increased long-term model?

Speaker #2: It's a very good question Kodi. And when you say long-term model it was a 2028 model which in my mind is somewhat of a mid-term model.

Russell Ellwanger: It's a very good question, Cody. When you say long-term model, it was a 2028 model.

Russell Ellwanger: It's a very good question, Cody. When you say long-term model, it was a 2028 model in my mind is somewhat of a midterm model. I talked about our focus for 2027 will be increasing 300 millimeter SiPho capacity, you know, the strategic focus, and hand in hand comes the SiGe capacity as well at 300 millimeters. That is not included in any model right now. The visibility, I think, will be fairly short-term. The timing of updating a model to a higher numbers, I would believe will be within the next quarters.

Cody Acree: Right

Russell Ellwanger: in my mind is somewhat of a midterm model. I talked about our focus for 2027 will be increasing 300 millimeter SiPho capacity, you know, the strategic focus, and hand in hand comes the SiGe capacity as well at 300 millimeters. That is not included in any model right now. The visibility, I think, will be fairly short-term. The timing of updating a model to a higher numbers, I would believe will be within the next quarters.

Speaker #2: But I talked about our focus for 2027 will be increasing 300 millimeter SIPHO capacity. The strategic focus. And hand in hand comes the SIGI capacity as well a 300 millimeter.

Speaker #2: But that is not included in any model right now. So the visibility I think will be fairly short term. The timing of updating a model to a higher numbers I would believe will be within the next quarter.

Speaker #4: Well that's excellent Russell. Thank you for that clarification. And the correction on long-term versus mid-term. Thank you. And then one last question if I may.

Cody Acree: Well, that's excellent, Russell. Thank you for that clarification and the correction on.

Russell Ellwanger: Good question, Cody. Appreciate the question.

Cody Acree: long-term versus midterm. Thank you. Then one last question, if I may. What is your view on integration of indium phosphide lasers? I know there's been a lot of industry concern about the reliability of the integrated laser as we move towards CPO, you know, versus an externally sourced laser alternative. I know that that's a strength of yours. Can you maybe just talk about the reliability steps that you've been able to make?

Speaker #4: What is your view on integration of indium phosphide lasers? I know there's been a lot of industry concern about the reliability of the integrated laser as we move towards CPO.

Speaker #4: Versus an externally sourced laser. Alternative? I know that that's a strength of yours. Can you maybe just talk about the reliability steps that you've been able to make?

Speaker #2: We see no reason that the integrated laser is any less reliable nor any more reliable than a discrete laser. As far as reliability the major thing that we're focused on is just the integration a strong integration of the laser into the silicon photonics IC.

Russell Ellwanger: We see no reason that the integrated laser is any less reliable nor any more reliable than a discrete laser. As far as reliability, the major thing that we're focused on is just the integration, a strong integration of the laser into the silicon photonics IC, and hence that there is no potential downside of integrating the two, and I think that is pretty seamless at this moment. The activities there was with OpenLight and the OpenLight platform, and it's going very well. So I would say that from our standpoint, we're very bullish about the integrated laser and additionally about an indium phosphide integrated modulator for 400 Gb. Our platforms can allow both, right? If whatever customer wants a form factor with external lasers, great.

Speaker #2: And hence that there is no potential downside of integrating the two. And I think that is pretty seamless at this moment. The activities there was with OpenLight and the OpenLight platform.

Speaker #2: And it's going very well. So I would say that from our standpoint we're very bullish about the integrated laser. And additionally about an indium phosphide integrated modulator for 400 gig.

Speaker #2: But our platforms can allow both right? If whatever customer wants a form factor with external lasers great. If they want to go with us on the integrated laser equally great.

Russell Ellwanger: If they want to go with us on the integrated laser, equally great. That, as far as their direction that they wish to go, we're somewhat agnostic, other than the fact that we're really pushing very strong on, very advanced 400G modulation. If you look at advanced modulators, the indium phosphide has tremendous advantages on form factor.

Speaker #2: That as far as their direction that they wish to go we're somewhat agnostic. Other than the fact that we're really pushing very strong on very advanced 400 g modulation.

Speaker #2: And if you look at advanced modulators, the indium phosphide has tremendous advantages on form factor.

Speaker #4: And Russell if I may since you brought it up I guess I'll just sneak one last one in here then. With the modulation schemes that you mentioned in the subsequent press release to your earnings release you mentioned a wide variety of modulation technologies that you're pursuing.

Cody Acree: Russell, if I may, since you brought it up, I guess I'll just sneak one last one in here then. With the modulation schemes that you mentioned in the subsequent press release to your earnings release, you mentioned a wide variety of modulation technologies that you're pursuing. Would you handicap or prioritize any one of those over the other as being a better fit for Tower in the intermediate to long term?

Speaker #4: Would you handicap or prioritize any one of those over the other as being a better fit for TOWER in the intermediate to long-term?

Speaker #2: No. I think we're equally competent in all. It's the thin film lithium niobate. Has multiple different ways to architect it. You can do a I'm not saying it's simple but you can do a separate lithium niobate modulator that's its own wafer.

Russell Ellwanger: No. I think we're equally competent in all. It's, you know, the thin-film lithium niobate has multiple different ways to architect it. You can do, I'm not saying it's simple, but you can do a separate lithium niobate modulator that's its own wafer and have that side by side to the PIC, or you integrate it as a chiplet onto the PIC. We're pursuing both form factors there with different customers. As far as the indium phosphide, obviously, that's, you know, an integrated onto the PIC. We're somewhat agnostic as to which one a customer would use. However, as you get to many channels, the indium phosphide really has a benefit on form factor.

Speaker #2: And have that side by side to the PIC, or you integrate it as a chiplet onto the PIC. And we're pursuing both form factors there with different customers.

Speaker #2: As far as the indium phosphide obviously that's an integrated onto the pick. But we're somewhat agnostic as to which one a customer would use.

Speaker #2: However as you get to many channels the indium phosphide really has a benefit on form factor.

Speaker #4: All right. Great. Thanks Russell.

Cody Acree: All right. Great. Thanks, Russell.

Speaker #2: Thank you Kodi. Very good questions. Appreciate it.

Russell Ellwanger: Thank you, Cody. Very good questions. Appreciate it.

Speaker #4: Thank you.

Cody Acree: Thank you.

Speaker #1: Thank you. And now we're going to take our next question. The question comes from the line of Richard Shannon from Craig-Hallum Capital Group. Your line is open.

Operator: Thank you. Now we're going to take our next question. The question comes line of Richard Shannon from Craig-Hallum Capital Group. Your line is open. Please ask your question.

Speaker #1: Please ask your question.

Speaker #2: Hey Richard.

Russell Ellwanger: Hey, Richard.

Speaker #5: Russell hi. How are you?

Richard Shannon: Russell, hi. How are you?

Speaker #2: Very good. Thank you.

Russell Ellwanger: Very good, thank you.

Speaker #5: Excellent. Apologies for the ambient noise here and just about graded a board of plane here. So if it's too loud my I'll try to call in later.

Richard Shannon: Excellent. Apologies for the ambient noise here. I'm just about ready to board a plane here. If it's too loud, I'll try to call in later. I guess I just have two basic questions here. The first one was regarding your capacity expansion in Japan. Kind of a two-parter here. The first part here is how do we think about the potential revenue capacity scale for silicon photonics as you get the, at least the first parts of the tranche, the tranches I'm sure you're building there. Do you have any worries about being short of capacity in silicon photonics before that Japan capacity expansion has started?

Speaker #5: But I guess I just have two basic questions here. The first one was regarding your capacity expansion in Japan. Kind of a two-parter here.

Speaker #5: The first part here is how do we think about the potential revenue capacity scale for silicon photonics as you get at least the first parts of the tranche the tranches I'm sure you're building there.

Speaker #5: And then, do you have any worries about being short of capacity in silicon photonics before that Japan capacity expansion is started?

Speaker #2: Excellent question. We're looking and hoping and believing that will in the very short term receive the METI approval. And we've already obviously begun with contractors to get planning done to get everything done.

Russell Ellwanger: Excellent question. We're looking and hoping and believing that we'll, in the very short term, receive the METI approval. We've already obviously begun with contractors to get planning done, to get everything done. Once we have the METI approval, we'll most likely put in for the permits. That is probably a year and a half type of a timeframe between breaking ground and having a facility that can be accepting tools and starting ramping the tools. Where does that put us? That puts us, in best case, in H1 2028 for that capacity. When you say worries, I mean, worry is an interesting question. Worries are also excitement, depending on how you turn it around.

Speaker #2: Once we have the METI approval, we'll most likely put in for the permits. But that is probably a year-and-a-half type of time frame between breaking ground and having a facility that can be accepting tools and starting ramping the tools.

Speaker #2: So where does that put us? That puts us in best case in the first half of 2028 for that capacity. And then when you say worries I mean worry is an interesting question.

Speaker #2: Worries are also excitement, depending on how you turn it around. The excitement right now is increasing with an existing footprint. Our capability with silicon photonics in Fab 7, which is the existing factory.

Russell Ellwanger: The excitement right now is increasing with an existing footprint, our capability with silicon photonics in Fab 7, which is the existing factory. We have approved capital spending for that for the first phase of it, which we've not publicly announced. I don't wanna get into the numbers at this point. We probably will within 2, 3 quarters in line with what Cody Acree asked about updating a financial model. We have an ability to go further before the shell is completed by taking advantage of an existing factory within the TPSCo complex. It was one that we announced a couple of years ago that we had shut down, and that was the Arai factory, which is under the ownership of Nuvoton Winbond.

Speaker #2: And we have approved capital spending for that for the first phase of it which we've not publicly announced. I don't want to get into the numbers at this point.

Speaker #2: We probably will within two three quarters in line with what Kodi asked about updating a financial model. But and then we have an ability to go further before the shell is completed.

Speaker #2: By taking advantage of an existing factory within the TPSCo complex—that was one that we announced a couple of years ago that we had shut down—and that was the RI factory.

Speaker #2: Which is under the ownership of Nuviton Windbond. But to put a certain amount of tools in a very specific set of tools within that factory to grow capacity relatively quickly within existing footprint if you will.

Russell Ellwanger: To put a certain amount of tools and a very specific set of tools within that factory to grow capacity relatively quickly within existing footprint, if you will. Our plan is not to miss out on any upside or not to be able. Our plan is certainly to meet customers' demand within 2027 while developing meaning building the shell that is substantially big. It would be an interim step. The beauty of the interim step is that any of the tools that we buy is applicable to the entire build. Even things that we would put initially into another factory, would over time come back into the existing geography. Meaning, well, not the existing, but the existing and built-out geography. Hopefully, that was not too obtuse of an answer.

Speaker #2: So our plans is not to miss out on any upside or not to be able our plan is certainly to meet customers demand within 27 while developing developing meaning building the shell that is substantially big.

Speaker #2: So it would be an interim step. The beauty of the interim step is that any of the tools that we buy is applicable to the entire build.

Speaker #2: Even things that we would put initially into another factory would over time come back into the existing geography meaning or not the existing but the existing and built out geography.

Speaker #2: Hopefully that was not too obtuse of an answer. I a lot of playing parts on it. But did that make sense Richard?

Russell Ellwanger: A lot of explaining parts on it, but did that make sense, Richard?

Speaker #5: It does. I'll revisit your comments and look at them more closely. But that was very detailed and helpful. My second question and I'm going to go on mute after this one and listen to your response is on the announcement on the 400 gig per lane silicon modulator for silicon photonics.

Richard Shannon: It does. I'll revisit your comments and look at them more closely, that was very detailed and helpful. My second question, I'm gonna go on mute after this one and listen to your responses. On your announcement on the 400 Gb per lane silicon modulator for silicon photonics you announced with Coherent.

Speaker #5: You announced it with coherent two-part questions. First of all can you use this technology or something similar with other customers? And then as you look across the 400 gig per lane generation how much of how much of your business will be silicon versus TFLN versus indium phosphide versus any other modulator technology?

Russell Ellwanger: Yes.

Richard Shannon: Two-part questions. First of all, can you use this technology or something similar with other customers? As you look across the 400 gig per lane generation, how much of your business will be silicon versus TFLN versus indium phosphide versus any other modulator technology? Thank you.

Speaker #5: Thank you.

Speaker #2: On the first question, certainly the 400g modulator that we had press release with Coherent was off of a Coherent design. What we know, and our know-how and our IP, is available for any customer.

Russell Ellwanger: On the first question, certainly the 400G modulator that we had press released with Coherent was off of a Coherent design. What we know and our know-how and our IP is available for any customer. This specific modulator performance was because of Coherent's design tied to our platform. If that makes sense, it's not something that we can give to anyone else, it's Coherent's IP. Coherent, in having designed it to our platform, other customers that would have or potentially could get the same capability as Coherent would be able to design something on our platform. As it stood, it was Coherent that did it and Coherent that had the design capability to do so. That's number 1.

Speaker #2: This specific modulator performance was because of coherent design tied to our platform. So if that makes sense it's not something that we can give to anyone else.

Speaker #2: It's Coherent's IP. But Coherent, and having designed it to our platform, other customers that would have or potentially could get the same capability as Coherent would be able to design something on our platform.

Speaker #2: As it stood it was coherent that did it and coherent that had the design capability to do so. That's number one. Number two I think you're asking me for what I think would be the first technologies to be utilized.

Russell Ellwanger: Number two, I think you're asking me for what I think would be the first technologies to be in-utilized. My personal view, and this is my view, and I'm certainly not a market analyst. I think the lithium niobate will come in fairly strong for one generation. I don't think it will last for many generations. I think it will go to an indium phosphide.

Speaker #2: My personal view and this is my view and I'm certainly not a market analyst. I think the lithium niobate will come in fairly strong for one generation.

Speaker #2: I don't think it will last for many generations. I think it will go to an indium phosphide.

Speaker #5: Great. Thank you Russell.

Richard Shannon: Great. Thank you, Russell.

Speaker #1: Thank you.

Operator: Thank you.

Russell Ellwanger: Thank you.

Speaker #3: Now we're going to now we're going to take our next question. And it comes down of Lisa Thompson from Zach's Investment Research. Your line is open.

Operator: Now we're going to take our next question, it comes line of Lisa Thompson from Zacks Investment Research. Your line is open. Please ask your question.

Speaker #3: Please ask your question.

Speaker #6: Hi. I was wondering if you could talk a little bit about gross margins. It seems surprising how much they increased in the first quarter given revenues were sequentially down.

Lisa Thompson: Hi. I was wondering if you could talk a little bit about gross margins. It seems surprising how much they increased in Q1, given revenues were sequentially down. Can you talk a little bit about how the margins went up? Was it more product mix, higher prices? How did that turn out?

Speaker #6: Can you talk a little bit about how the margins went up? Was it more product product mix? Higher prices? How did that turn out?

Speaker #2: Yeah. Basically it's consistent with our model that we published last quarter. In our model you see that we assumed incremental revenue coming at 59% to the gross profits.

Oren Shirazi: Yeah. Basically, it's consistent with our model that we published last quarter. In our model, you'll see that we assumed incremental revenue coming at 59% to the gross profit over a baseline, which was 20% a year ago. Last year, as you see in this report, Q1 2025 gross profit was 20%. In our model we assumed the incremental would come at 59, and the fully built out model will reach to 39%. This quarter we already achieved 27%. Like you said, it's very nice that we already are up from the 20 to 27. That's the linear progression that we expect towards the 39 when we achieve the 2.8.

Speaker #2: Over a baseline which was 20% a year ago. So last year as you see in this report Q1 25 gross profit was 20%. And in our model we assumed the incremental would come at 59.

Speaker #2: And at the fully built out model we'll reach to 39%. This quarter we already achieved 27%. So like you said it's very nice that we already are up from the 20 to 27.

Speaker #2: And that's the linear progression that we expect towards the 39 when we achieve the 2.8.

Speaker #3: So it's really just selling more, newer, higher-margin products.

Lisa Thompson: It's really just selling more newer higher margin products?

Speaker #2: Yes. Yes.

Oren Shirazi: Yes. Yes.

Oren Shirazi: Yes.

Speaker #3: Okay. Okay. And then I'm just going back to the technology. Is there anything that you're concerned about? As opposed to your capacity maybe being able to get parts or be constrained?

Lisa Thompson: Okay. Okay. Just going back to the technology. Is there anything that you're concerned about, like as opposed to your capacity maybe being able to get parts or being constrained? I know indium phosphide is hard to get and is constrained. Is that going to change anything or do customers just switch to something else?

Speaker #3: I know indium phosphate is hard to get and is constrained. Is that going to change anything or do customers just switch to something else?

Speaker #2: You are correct. That indium phosphide right now is constrained. In our case not necessarily the end laser product is the constraint. The starting material is the constraint.

Russell Ellwanger: You are correct that indium phosphide right now is constrained. In our case, not necessarily the end laser product is the constraint, the starting material is the constraint. No, I think we have good plans and good supply chain activities so that whatever constraint issues there might be, we're working through. As these products ramp, which they should be ramping on the indium phosphide integrated laser, it should be ramping this year, I believe that we'll be in good position to meet the demand.

Speaker #2: But no, I think we have good plans and good supply chain activities, so that whatever constraint issues there might be, we're working through. And as these products ramp—which they should be, ramping on the indium phosphide integrated laser—it should be ramping this year.

Speaker #2: I believe that will be in good position to meet the demands.

Speaker #3: Okay. Thank you. Those are my questions.

Lisa Thompson: Okay. Thank you. Those are my questions.

Speaker #1: Thank you. Now we're going to take our next question. And the question comes line of Krish Sankar from TD Cowen. Your line is open.

Operator: Thank you. Now we're going to take our next question. The question comes line of Krish Sankar from TD Cowen. Your line is open. Please ask your question.

Speaker #1: Please ask your question.

Speaker #6: Yeah. Hi. Thanks for taking my question. I had told them Russell one is I'm just kind of curious where you think your silicon photonics market share is today and where do you think it'll be in the next couple of years given your longer term contractual contracts from your customers?

Krish Sankar: Yeah. Hi, thanks for taking my question. I have two of them, Russell. One is, I'm just kind of curious where you think your silicon photonics market share is today and where do you think it'll be in the next couple of years, given your longer term contractual contracts from your customers. I'm asking in light of the fact that, you know, GlobalFoundries ramping scale and TSMC is ramping their COUPE platforms. I'm just curious where you think your market share could head from today through the next 2 years. I have a follow-up.

Speaker #6: I'm asking in light of the fact that GlobalFoundries is ramping scale and TSM is ramping the CoOP platforms. I'm just curious where you think your market share could head from today through the next two years.

Speaker #6: And then I'll follow up.

Russell Ellwanger: That's a very, very interesting question. There's other people that claim very high market shares. I don't see how it's possible at all. I'm not going to give a percentage market share at present, but I think that we're certainly the leading market share, and by far the leading market share in silicon photonics presently. I see no reason why that should change.

Speaker #2: It's a very very interesting question. There's other people that claim very high market shares. I don't see how it's possible at all. I'm not going to give a percentage market share at present but I think that we're certainly the leading market share and by far the leading market share in silicon photonics presently.

Speaker #2: And I see no reason why that should change.

Krish Sankar: Got it, Russell. Then, just to follow up on the technology side of advanced packaging. Clearly, you do have experience with hybrid bonding on CMOS image sensors. When do you think that ports over to the silicon photonics side? Is that a real advantage in the short term or is this something more of a longer term story?

Speaker #6: Got it Russell. And then just to follow up on the technology side of the advanced packaging. Clearly you do have experience with hybrid bonding on CMOS image sensors.

Speaker #6: When do you think that ports over to the silicon photonics side and is that a real advantage in the short term? Is it something more of a longer term story?

Speaker #2: I think it's a very strong advantage mid to long term. Not so important for this year.

Russell Ellwanger: I think it's a very strong advantage mid to long term, not so important for this year.

Krish Sankar: Got it. Thanks, Russell.

Speaker #6: Got it. Thanks Russell.

Speaker #2: Thank you. Good question.

Russell Ellwanger: Thank you. Good question.

Speaker #1: Thank you. Now we're going to take our next question. And the question comes line of Mahdi Husseini from Susquehanna Financial Group. Your line is open.

Operator: Thank you. Now we're going to take our next question. The question comes line of Mehdi Hosseini from Susquehanna Financial Group. Your line is open. Please ask your question.

Speaker #1: Please ask your question.

Speaker #5: Yes, thank you. There are a couple of follow-ups. RF Mobile was down almost 36% quarter over quarter. Obviously, it sets up a low base, and I expect growth for the remainder of the year.

Mehdi Hosseini: Yes. Thank you. Just a couple of follow-up. RF mobile was down almost 36% Q-over-Q. Obviously it sets up a low base, and I expect growth for the remaining of the year. How should I think about the RF mobile in 2026 versus 2025? I have a follow-up.

Speaker #5: But how should I think about the RF Mobile in 2026 versus '25? And I have a follow-up.

Speaker #2: Yeah. I just know that indeed Q4 25 was an exceptional growth in SOI compared to previous quarters. So year over year it's not was not reduced.

Oren Shirazi: Yeah. I just know that indeed Q4 2025 was an exceptional growth in SOI compared to previous quarters. Year over year was not reduced. It just really was a specific ramp in Q4 2025.

Speaker #2: It just really was a specific ramp in Q4 25.

Speaker #5: Okay.

Mehdi Hosseini: Okay.

Speaker #2: But Russell will address 26.

Oren Shirazi: Russell will address 2026. Yeah.

Russell Ellwanger: As stated, we're moving away from our 200 millimeter RF SOI and customers as well, and transitioning to newer 300 millimeter design wins. The design win cycle is extremely strong, and if we look at the multi-year forecast, I see the RF SOI increasing as a total on the 200 plus 300, but the 200's almost gone. In the very short term, not everything has transitioned to 300 yet. You are correct, it was down and, you know, if I look at the full year. Let me just see if to be more accurate. Yes, I would see the whole year being down against the previous year, even at 300 millimeter. I would expect that in 2027 and 2028, it'll be record growth for the RF SOI at 300 millimeter.

Speaker #6: As stated, we're moving away from our 200-millimeter RF SOI, and customers as well, and transitioning to newer 300-millimeter design wins. The design wins cycle is extremely strong.

Speaker #6: And if we look at the multi-year forecast, I see the RF SOI increasing as a total—the 200 plus 300. But the 200 is almost gone.

Speaker #6: In the very short term not everything is transitioned to 300 yet. So you are correct. It was down in if I look at the full year let me just see if to be more accurate.

Speaker #6: Yeah. I would see the whole year being down against the previous year even at 300 millimeter. But then I would expect that in 27 and 28 it'll be record growth for the RF SOI at 300 millimeter.

Speaker #6: We have multiple design wins that have been awarded, but they're for phone models that first come out in '28. I mean, that's how the industry works.

Russell Ellwanger: We have multiple design wins that have been awarded, but they're for phone models that first come out in 2028. I mean, that's how the industry works. Which means that they would start needing to be bought in Q3 of 2027.

Speaker #6: Which means that they would start needing to be bought in the third quarter of '27.

Speaker #5: Got it. Okay. And then one follow up. When I look at the overall industry and analog foundry and outside of RF infrastructure it seems like the overall utilization rate for the industry is improving.

Mehdi Hosseini: Got it. Okay. Then, one follow-up. When I look at the overall industry and analog foundry and outside of RF infrastructure, it seems like the overall utilization rate for the industry is improving. Some of your peers have actually talked about higher prices, higher wafer prices, like for like. What I wanted to ask you, a better understand is, how should we separate the mix of obviously RF infrastructure, higher growth rate, higher margin. Outside of RF infrastructure, should we also assume that there is some pricing power that is coming to you?

Speaker #5: Some of your peers have actually talked about higher prices higher wafer prices like for a like. And what I wanted to ask you better understand is how should we separate the mix obviously RF infrastructure higher growth rate higher margin but outside of RF infrastructure should we also assume that there is some pricing power that is coming to you?

Speaker #2: Pricing power is particularly done by having best in class platforms in my mind. So if you have something that allows the customer to gain advantages by using your platform you can pay you can charge a premium for it.

Russell Ellwanger: Pricing power is particularly done by having best-in-class platforms, in my mind. If you have something that allows the customer to gain advantages by using your platform, you can charge a premium for it. We are not a company that likes to indiscriminately raise prices because of a capacity constraint. I think that that's honestly not a partnership model. There's times that potentially customers might have to go on allocation because there's too much demand. I think that it's not necessarily a good practice as far as relationship and integrity to raise prices just because there's a demand constraint. In general, our pricing benefits are with new generation platforms for new technologies.

Speaker #2: We are not a company that likes to indiscriminately raise prices because of the capacity constraint. I think that that's honestly not a partnership model.

Speaker #2: There's times that potentially customers might have to go on allocation because there's too much demand. But I think that it's not necessarily a good practice as far as relationship and integrity to raise prices just because there's a demand constraint.

Speaker #2: So in general our pricing benefits are with new generation platforms for new technologies. And every time that we put out a new platform the starting price point is certainly higher than the platform that's being sold for that technology presently.

Russell Ellwanger: Every time that we put out a new platform, the starting price point is certainly higher than the platform that's being sold for that technology presently. I did mention that at the 200 millimeter power management, it did realize a 13% price increase for, you know, starting, I think this quarter or throughout this year. That was really in evaluating what is the value of the platform itself as compared to potential price reductions that have been given over the past years, and that just truly needed a reset. It wasn't based upon looking at a capacity constraint and, you know, forcing a customer because they have no other choice. It was basically just reevaluating what is the value of what we're selling and what should the pricing be.

Speaker #2: I did mention that at the 200 millimeter power management it did realize a 13% price increase for starting I think this quarter throughout this year.

Speaker #2: That was really in evaluating what is the value of the platform itself as compared to potential price reductions that have been given over the past years.

Speaker #2: And that that just truly needed a reset. But it wasn't based upon looking at a capacity constraint and forcing a customer because they have no other choice.

Speaker #2: It was basically just re-evaluating what is the value of what we're selling, and what should the pricing be.

Speaker #5: Great. Very insightful. Thank you.

Mehdi Hosseini: Great. Very insightful. Thank you.

Speaker #1: Thank you. And now we're going to take our last question for today. And it comes line of Cody Ackley from Benchmark. Your line is open.

Operator: Thank you. Now we're going to take our last question for today, and it comes in of Cody Acree from Benchmark. Your line is open. Please ask your question.

Speaker #1: Please ask your question.

Speaker #6: Hey guys. Thanks for taking my follow ups. Just a couple quick ones. Russell maybe thematically can you talk about the move to CPO and the industry's larger integrated player in the market of Taiwan Semi and their CMOS integration of the SIPO side of things and their leverage of being a one stop shop for somebody like an NVIDIA long term and how does Tower compete with that on a long term basis with your hybrid strategy?

Cody Acree: Hey, guys. Thanks for taking my follow-ups. Just a couple quick ones. Russell, maybe thematically, can you talk about the move to CPO, and the industry's larger integrated player in the market, Taiwan Semi, and their CMOS integration of the SiPho side of things? You know, with their leverage of being a one-stop shop for somebody like an NVIDIA long term, how does Tower compete with that on a long-term basis with your hybrid strategy?

Russell Ellwanger: Yeah. I think for part of your question, you wanted me to do a marketing for TSMC, and that's really not my job. No, on a serious base, as I stated, the NPO XPO pluggable will stay the primary demand at least into the beginning of the next decade as CPO starts to get greater traction. On the CPO side, I believe that the big benefit that we will add is by having PICs that are extremely beneficial because of the performance of the PIC itself. I mean, in theory, there's no reason that TSMC wouldn't be buying our PIC for their COUPE if our PIC was much superior to everything else. Now there is one thing, well, multiple things you said that's 100% accurate.

Speaker #2: Yeah. I think for part of your question you wanted me to do a marketing for TSMC and that's really not my job. But no on a serious base as I stated the NPO XPO pluggable will stay the primary demand at least into the beginning of the next decade.

Speaker #2: As CPO starts to get greater traction. On the CPO side I believe that the big benefit that we will add is by having picks that are extremely beneficial because of the performance of the pick itself.

Speaker #2: I mean there's in theory there's no reason that TSMC wouldn't be buying our pick. For their coop if our pick was much superior to everything else.

Speaker #2: So now, there is one thing—well, multiple things—you said that's 100% accurate. I mean, TSMC as a one-stop shop, I think there's nobody that can compete with TSMC with what they're doing on the extreme deep digital content.

Russell Ellwanger: I mean, TSMC as a one-stop shop, I think there's nobody that can compete with TSMC with what they're doing on the extreme deep digital content. You know, that is not something we have. That's not something we could take them on or try to work at or look at. As far as having modulation with three, five and other materials that's much better than anyone else could have, that's where we would add value in that's one of the big things I mentioned on our CPO roadmap, is really a very strong focus on modulation.

Speaker #2: That is not something we have. So that's not something we could take the monitor try to work out or look at. But as far as having modulation with three five and other materials that's much better than anyone else could have that's where we would add value in that.

Speaker #2: And that's one of the big things I mentioned on our CPO road map is really a very strong focus on modulation.

Speaker #6: All right. Great. Thanks Russell. And then maybe lastly for Oren can you help us out with any thoughts on future tax rate interest income non controlling interest lines any of the ancillary items of the income statement?

Cody Acree: All right, great. Thanks, Russell. Maybe lastly for Oren, can you help us out with any thoughts on future tax rate, interest income, non-controlling interest lines, any of the ancillary items of the income statement?

Speaker #3: Yeah. Financing and other income line which is about 10 million a quarter I would expect will remain the same. Tax line so like I said in my prepared remarks should be on a run rate I mean on a regular model at least 15% because of Pillar 2 which is applicable to all regions.

Oren Shirazi: Yeah. Financing and other income line, which is about $10 million across that I would expect will remain the same. Tax line, like I said in my prepared remarks, should be on a run rate, I mean, on a regular model, at least 15% because of Pillar Two, which is applicable to all regions. Up to maybe 18% because we have some regions that are higher than 15, like US 21, Japan, Italy. I would assume between 15% to 18% on the tax.

Speaker #3: And up to maybe 18% because we have some regions that are higher than 15 like US 21 Japan Italy. So I would assume between 15 to 18% on the tax.

Speaker #6: And the non controlling interest line?

Cody Acree: The non-controlling interest line?

Oren Shirazi: That should be pretty much like it is now. I mean, this quarter we had a specific upside there, which I mentioned because of the Japan-related income tax benefit, which is non-recurring item. Excluding that should be like the previous period, so it was about very small amount, right? It's not impacting our P&L.

Speaker #3: That should be pretty much like it is now. I mean, this quarter we had a specific upside there, which I mentioned because of the Japan-related income tax benefit, which is a non-recurring item.

Speaker #3: But excluding that, it should be like the previous periods. So it was about very small amounts, right? It's not impacting our opinion there.

Speaker #2: Yeah Cody I just wanted if I could to clarify what I said. When I refer to there's nothing that would prevent TSMC from buying our picks.

Russell Ellwanger: Yeah, Cody, I just wanted, if I could, to clarify what I said. When I refer to there's nothing that would prevent TSMC from buying our PICs, what I'm including in that is that we become the reference design for the major integrators, and that would be part of what they'd be using with TSMC.

Speaker #2: What I'm including in that is that we become the reference design for the major integrators. And that would be part of what they'd be using with TSMC.

Speaker #6: And Russell maybe can you expand on that with your relationship your recent relationship with NVIDIA at 1.6T and obviously they have been using Taiwan Semi for their history but they're also partnering with you going forward.

Cody Acree: Russell, maybe can you expand on that with your relationship, your recent relationship with NVIDIA at 1.60, obviously they have been using Taiwan Semi for their history, but they're also partnering with you going forward?

Speaker #2: Yeah, Cody, I really honestly wish that I could. I don't have freedom to talk about specific programs with customers. Other than the PR that we did with NVIDIA, it was fairly clear that he talked about us as a development partner.

Russell Ellwanger: Yeah, Cody, I really honestly wish that I could. I don't have freedom to talk about specific programs with customers other than the PR that we did with NVIDIA. It was fairly clear that he talked about us as a development partner.

Speaker #6: All right. Great. Thanks you guys.

Cody Acree: All right, great. Thanks, you guys.

Speaker #1: Thank you. The speakers turned off for the questions for today. I would now like to hand the conference over to Russell and Wonga for any closing remarks.

Operator: Thank you. Dear speakers, that's all for the questions for today. I would now like to hand the conference over to Russell Ellwanger for any closing remarks.

Speaker #2: Yes. Thank you very much. I really appreciate your continued trust and support. I want to thank our teams, the Tower teams around the world, whose dedication has made the progress that we've reported possible—and the progress that we expect to have over the next year and years.

Russell Ellwanger: Yes. Thank you very much. Really, appreciate your continued trust and support. I want to thank our teams, the Tower teams around the world, whose dedication has made the progress that we reported possible and the progress that we expect to have over the next year and years possible. It's a very exciting thing. Success begets success, and the more success we have with our customers, the more excited they are, the more that inspires our own people, and it becomes a partnership that is an incredible partnership. I'd mentioned Coherent as one, but we have extremely good relationships with multiple of the optical customers. I would think with all of them.

Speaker #2: Possible. It's a very exciting thing success begets success and the more success we have with our customers the more excited they are the more that inspires our own people and it becomes a partnership that is an incredible partnership.

Speaker #2: I had mentioned Coherent as one, but we have extremely good relationships with multiple of the optimal customers. I would think with all of them.

Speaker #2: And it's a very exciting thing to have because when the customers really happy with you and your performance the interactions become very inspiring for next generation two generation off developments.

Russell Ellwanger: It's, it's a very exciting thing to have because when the customer is really happy with you and your performance, the interactions become very inspiring for next generation, two generation of developments. I thank our teams, and I really thank our customers. As far as the equity stakeholders, I truly appreciate your continued trust and support, and we would look forward to seeing you over a variety of events that we have planned for the coming months. On 18 May, we'll participate in the 27th Annual Oppenheimer Israeli Conference in Tel Aviv. On 27 May, we'll attend the 54th Annual TD Cowen Technology, Media and Telecom Conference in New York. On 28 May, we'll participate in the 23rd Annual Craig-Hallum Institutional Investor Conference in Minneapolis. On 9 June, we'll attend the 2026 Susquehanna Global Tech Conference in New York.

Speaker #2: So I thank our teams and I really thank our customers. As far as the equity stakeholders I truly appreciate your continued trust and support.

Speaker #2: And we would look forward to seeing you over a variety of events that we have planned for the coming months. On May 18th, we'll participate in the 27th annual Oppenheimer Israeli Conference in Tel Aviv.

Speaker #2: On May 27th we'll attend the 54th annual TD Cohen Technology Media and Telecom Conference in New York. On May 28th we'll participate in the 23rd annual Craig Hallam Institutional Investor Conference in Minneapolis.

Speaker #2: On June 9th we'll attend the 2026 Matsuho Global Tech Conference in New York. If you have availability to be at any of these we'd certainly love to meet with you.

Russell Ellwanger: If you have availability to be at any of these, we'd certainly love to meet with you. As always, our investor relations is very open to accepting calls and setting up video calls with anyone that would wish further updates and understandings about what we think is an extremely exciting activity and a very, very rich roadmap. Thank you very, very much.

Speaker #2: And as well as always, our investor relations is very open to accepting calls and setting up video calls with anyone that would wish further updates and understandings about what we think is an extremely exciting activity.

Speaker #2: And a very very rich road map. Thank you very very much.

Operator: This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.