Good day, ladies and gentlemen, and welcome to Ichor's Third Quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. Should anyone require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Claire McAdams, Investor Relations for Ichor. Please go ahead. Thank you, Operator. Good afternoon, and thank you for joining today's third quarter 2025 conference call. As you read our earnings press release and as you listen to this conference call, please recognize that both contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control and which could cause actual results to differ materially from such statements. These risks and uncertainties include those spelled out in our earnings press release, those described in our annual report on Form 10-K for fiscal year 2024, and those described in subsequent filings with the SEC. You should consider all forward-looking statements in light of those and other risks and uncertainties. Additionally, we will be providing certain non-GAAP financial measures during this conference call. Our earnings press release and the financial supplement posted to our IR website each provide a reconciliation of these non-GAAP financial measures to their most comparable GAAP financial measures. On the call with me today, as usual, are Jeff Andreson and Greg Swyt. We also have our newly named CEO, Phil Barrows, joining us for today's call. Jeff will begin with an update on our business, and then Greg will provide additional details about our results and guidance. Phil will then make his remarks before opening the line for questions. I'll now turn over the call to Jeff Andreson. Jeff? Thank you, Claire, and welcome everyone to our Q3 earnings call. Thanks for joining us today. This afternoon, along with our third quarter earnings release, we announced that Phil Barrows, our longtime CTO, has been named Ichor's CEO effective today. We are very pleased to have Phil joining us for today's call. Phil has been with Ichor for over 20 years and held executive roles spanning engineering, product management, sales, account management, and corporate development and strategy. He has been instrumental in the development of the company's product strategy, and I look forward to watching the company's success develop under Phil's leadership. Third quarter revenues of $239 million exceeded the midpoint of our expectations entering the quarter. Similar to the upside witnessed in Q2, we once again experienced customer accelerations of certain gas panel deliveries for dry etch and deposition applications into the quarter. There's no question that the demand environment for etch and deposition is strong and has strengthened year to date, particularly in support of leading-edge investments in Gate-All-Around and High-Bandwidth Memory. We believe the Q3 upside, however, reflected a pulling of deliveries from the fourth quarter rather than an increase in overall second-half demand among our primary customers. At the same time, the demand profile for other serve markets continued to weaken as we progressed through the third quarter. While we've been discussing demand erosion affecting multiple applications for several quarters now, most significantly in the areas of EUV Lithography and Silicon Carbide, what surprised us most during Q3 was the decline in our non-semi end markets. As we entered the third quarter, we began to see order rates coming down from within our IMG business. As a reminder, the primary non-semi markets served by IMG include commercial space and aerospace and defense. IMG's business also brings strong contribution margin to our overall financial performance. So when we did not see IMG order rates recover to their planned levels inside of the quarter, as we had expected in early August, this resulted in a one percentage point impact to our Q3 gross margin. As a result, our continued progress made during Q3 in ramping capacity of our internally sourced components and meeting our hiring objectives was overshadowed by the gross margin impact of lower IMG revenue volumes. With our current visibility, we are expecting IMG to continue to run at a lower rate for the remainder of the year, which is reflected in both our revenue and gross margin guidance for the fourth quarter. Our Q4 forecast now reflects meaningful forecast revisions from our third and fourth largest customers, reflecting the continued slowing in system build rates for certain applications and end markets. Our operational focus continues to be on improving the cost of our internal component manufacturing capacity to align with our targeted product margins and increasing our output to fulfill our customer demand. In parallel, we are making steady technical and operational progress on our two additional proprietary component products, which are designed to expand our addressable markets for both flow control and valves. We are targeting our first beta unit for customer evaluation in early 2026. These next-generation offerings will allow us to serve a broader range of applications and customer needs, further increasing our value across the semiconductor supply chain. As we reflect on the customer demand environment, there's no question that our 18% year-over-year revenue growth recorded for the first three quarters of 2025 demonstrates strong performance relative to overall wafer fab equipment or WFE growth. Our strong growth this year reflects increased demand from our two largest customers and a strengthening environment for etch and deposition, partially offset by declines in our EUV lithography business, our silicon carbide business, and the closure of some of our smaller underperforming business units during the year. With the currently strong demand environment for etch and deposition expected to continue, the beginning of a recovery in these underperforming serve markets for Ichor could very well result in Q4 2025 proving to be the trough quarter for this next phase of Ichor's growth ahead with Phil Barrows as CEO. With that, I'll turn it over to Greg to recap our Q3 results and provide further details around our financial outlook. Greg? Thanks, Jeff. To begin, I would like to emphasize that the P&L metrics discussed today are non-GAAP measures. These measures exclude the impact of share-based compensation, amortization of acquired intangible assets, non-recurring charges, and discrete tax items and adjustments. There is a useful financial supplement available in the investor section of our website that summarizes our GAAP and non-GAAP financial results, as well as a summary of the balance sheet and cash flow information for the last several quarters. Third quarter revenues were $239.3 million, above the midpoint of guidance, up 13% year-over-year and roughly flat to Q2. The gross margin for the quarter was 12.1%. As Jeff discussed, while we made good progress in ramping output of our internally sourced products, the slowdown in our non-semi business impacted Q3 gross margin by 100 basis points. With operating expenses aligned with forecast at $23.8 million, our operating income for Q3 was $5.1 million. Our net interest expense and net income tax expenses were likewise aligned with our expectations at $1.7 million and $0.7 million, respectively. The resulting EPS for the quarter was $0.07 per share. Our Q3 GAAP results reflect $18.3 million in restructuring costs related to the strategic consolidation of our global operations and consisted of inventory impairment and fixed asset charges, as well as personnel transition and facility shutdown costs. We anticipate there may be additional charges in the fourth quarter and fiscal 2026 as we continue to execute on the strategy. Turning to the balance sheet, our cash and equivalents totaled $92.5 million at the end of the quarter, flat to Q2. We generated $9 million in cash from operations, and our capital investments for the quarter were $7.1 million. Working capital changes reflect a consistent level of day sales outstanding and an $18 million decrease in inventory. Our planned CapEx investments for 2025 are still expected to total approximately 4% of revenue as we finish the build-out of our new Malaysia factory that aligns with our strategy to consolidate our global operations and capacity in close alignment with our customers. In Q3, we completed the refinancing of the company's credit facility in order to reduce our overall borrowing costs. This refinance impacted our GAAP provision for other expenses during the quarter. We reduced the fixed amount of the revolver facility from $400 million to $225 million in favor of an Accordion feature. We also extended the term of the facility another five years. Our outstanding term loan balance remained unchanged, and at the end of the quarter was $125 million, and our net debt coverage ratio was 1.5 x, well below any potential threshold for covenants. Now I will discuss our guidance for the fourth quarter of 2025. With anticipated revenues in the range of $210 million-$230 million, we expect our Q4 gross margins to be between 10%-12%. In comparison to our earlier expectations for gross margin, about half of the reduction is due to the lower level of IMG revenues, and the other half is due to the lower revenue from our third and fourth largest semi customers. We expect Q4 operating expenses to remain relatively consistent with Q3 levels at approximately $23.7 million. Net interest expense for Q4 is expected to be approximately $1.7 million. We expect to record a tax expense in Q4 of approximately $900,000. Reflecting a full-year non-GAAP tax expense of $5.6 million, which is unchanged from our prior expectations. As you update your models for 2026, our assumed effective tax rate is currently expected to be in the range of 15%-17%. Finally, our EPS guidance range for Q4 of a loss of $0.14 to a profit of $0.02 reflects a share count of 34.5 million shares. I'll now turn over the call to Phil Barrows. Phil? Thank you, Greg. First, I want to thank the board for their confidence and Jeff for his mentorship. And most of all, our employees. You make everything we do possible. It's an honor to lead the company I've been part of for nearly 22 years into the next phase of growth. While I may be new to the CEO role, I am not new to Ichor, our business, or our customers. I want to outline the strategic priorities that will drive us in our next phase of growth. 2026 will be a year of transition for Ichor. We plan to realign our global footprint and cost structure to strengthen our long-term profitability while leveraging the benefits of our recent strategic investments. We are focused on improving our product margins across all of our product verticals. These initiatives are aimed at driving our earnings growth faster than our revenue. As one of the key architects of our proprietary product strategy, I fully believe it's the right strategy for Ichor. Our focus is now on smoother execution, completing customer qualifications, transitioning our products to volume, and delivering new products to give Ichor and our customers a clear competitive edge. We believe in the long-term fundamentals of our markets, driven by AI, high-performance logic, and advanced packaging. These inflections are reshaping the industry and will drive sustained growth in our core WFE markets. Our goal is not to simply grow with the market; it's to outpace it. At our core, we are an engineering company. We create value by engaging early with our customers to solve their most critical problems. These partnerships enable us to drive sustainable growth by developing products and solutions that Ichor is uniquely positioned to provide. Finally, our machining business drives the highest contribution margin across our product portfolio. We will stay focused on expanding it across both our semiconductor and non-semiconductor markets. I see tremendous opportunities ahead and have complete confidence in our team's ability to continue to outgrow the markets we serve. With that, I will now open the call for Q&A. Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Brian Chin with Stifel. You may proceed with your question. Hi, good afternoon, and appreciate the question, opportunity to ask a few questions. Thank you, Jeff, for your help over the years. And welcome, Phil. Look forward to speaking with you more. Maybe first question on the environment. And some of the updates here on the call. Can you quantify the revenue shortfall from IMG in Q3? How much is IMG sales expected to decline in Q4? What's driving the decline? And what's the prognosis for returning to Q2 revenue levels sometime next year? Yeah. So it's Jeff. Hey, Brian. Yeah, I would say entering the quarter, it was down a couple, $2.5 million or so from what we expected. And most of that was in their higher margin businesses. Going into Q4, it's going to drop again a similar level, stabilize, we believe, and then start to recover in the first quarter. I would say maybe by the second quarter, we'll be back to where we thought we would be about now. That's the IMG story. What was the second part that I can't remember? Right. So that was the part that was sort of what drove the decline? Yeah, yeah, yeah. It's interesting. I think some of this is just, it's taken we have some business that runs at a run rate into the supply sub-tier that was a portion of it. The biggest portion was really new programs where the funding just didn't drop down through the prime to us. It's not gone. It's just a matter of when it comes. A piece of it has already arrived, so it's already been kind of incorporated into it. Another couple of pieces are going to start to layer in. Really, they won't be able to affect the fourth quarter. They'll start to help the first quarter grow. Got it. Okay. So that can tie into sort of the budget gridlock that we have and the continued resolution in terms of frozen budget levels and whatnot. Yeah, which I think that could be definitive, but I can't on that. I don't know what's taken so long. Probably. Got it. Maybe second question. In terms of your top four, and there's been kind of more weakness on maybe your two smaller of the four customers that kind of is lingering here maybe until the end of this year. What type of optimism do you have? There was something in the press release that sort of suggested some optimism that business levels improve first half next year. Can you maybe provide a little bit more color on what kind of visibility you have months and quarters and kind of what gives you a sense that the business trajectory can come back in the first half next year? Yeah, a good question. I mean, again, I think l argely the outlook as we entered the third quarter, what's really changed, I think you pointed out, was it's the IMG softness, and then it's our smaller, our non-10% customers business levels. What we have seen from a visibility is already we're starting to see a recovery into Q1. I think some of the latest news about the elimination of the 50% ownership threshold, I think we're going to see some impact from that. Having said that, we haven't seen anything, and it's probably pretty late in the quarter to react to that. I think we can already see kind of the core depth and edge markets starting to bounce up. I'm not ready to guide you a quarter one revenue, but we're pretty confident that we're seeing Q4 as the trough. Thanks. Thanks, Jeff. Maybe last question. This might be for Phil. So adjusting for that lower IMG mix in Q3, it sounds like gross margins might have increased around 60 basis points or so Qo Q, or not for that kind of unfavorable mix. I guess firstly, was that tied to some improved operational execution in terms of the internal component supply ramp in Minnesota? And then kind of more broadly, reflecting on sort of the transition year commentary you made, I know it's maybe a little unfair to ask you this right out of the bat, Phil, but what can the company do? What will the company do? Yeah. So yeah, answer it however you can, but what can the company do? What will the company do in the next 6, next 12 months to sustainably improve the execution around that internal supply and product yield the way a good foundation for the appreciable gross margin improvement once. Helped, obviously, once Rev can I get back to that 250 per quarter level as well? Yeah, I'll start off with the answer, and then I'll head off to Greg and talk about the 250 number. What I'll say is the new products, we are on track or on track to what we projected last quarter in terms of our improvements that we talked about last quarter. So well on track there. We have key initiatives to continue to increase our gross margin on those products. In particular, getting our valve product line to our product margins where we want it to be. We're very close to those and should see that in early next year. We'll continue to see those grow over the next couple coming quarters. With that said, I'm going to hand over the 250 question over to Greg. You don't mind, Greg? Yep. Thanks, Phil. I think, Brian, the first question was on the Q3 miss. We talked about IMG, but the recovery quarter over quarter within the machining business was there. It's just that the full miss was really predominantly driven by the IMG miss. When we look out into the outer quarters, we are, as Phil talked about, the plans on the machining business. We still expect to get to the mid-teens. When we get to that kind of second half, what we've always been saying recently for the past couple calls is that $250 run rate still expect to be in those mid-teens as we execute on our machining strategy to get the volumes up and get those efficiencies to where we expect them to be. That's great. Thanks, Phil. Thanks, Greg. Thanks, Brian. Our next question comes from Charles Shi with Needham. You may proceed with your question. Hi. Hi, Jeff. Really appreciate working together for the last couple of years, and we wish you well for your next chapter. Phil, welcome aboard. Looking forward to more conversation with you. Maybe the first question I want to ask is a little bit more near-term. Some of the commentary would help you clarify a little bit. You talked about the Q3 revenue benefit from some of the pull-ins. You talked about some of the Q4 revenue decline. There are some downward revisions from number three and number four customers. Are those two things correlated, meaning, was a pull-in into Q3 done by the number three and number four customer, or are they not? Thank you. Hey, Charles, thanks. It's Jeff. No, I would say generally they're unrelated. I mean, the pull-in actually was offsetting some of the softness in IMG, but I would say largely that was at our largest customer. Great. Thanks for getting that clarified. Jeff, I want to get, Jeff and Phil, I want to get your thoughts a little bit more specific on next year's expectations, maybe not exactly about Ichor, but the overall WFE trend. I think your customers have talked about maybe first half next year kind of at the similar level as the second half this year. Second half next year could see some of the stronger inflection to the upside. Are you aligned with that? Specifically on maybe the outer quarter Q1, Q2, since your second half 2025 run rate actually come down a little bit given your Q4 or you guided for Q4, is that still the same picture there? Thank you. Hey, it's Jeff. What I would tell you is we still kind of see a more back half-weighted year next year with the growth. The year, probably you're going to have to assume it starts around mid-year. I think some of this China reduction of the 50%, that might also help the front half a bit, but I still think our view is a stronger back half of the year. A stronger 2027 is kind of what is our view of what's going to happen over the next couple of years. Thank you. Our next question comes from Craig Ellis with B. Riley Securities. You may proceed with your question. Yeah, thanks for taking the question. I'll echo the thanks to Jeff and the good wishes and the welcome to Phil. Look forward to being in conversation going forward. I was hoping I could pick up on some of the questions thus far. It sounds like as we look into 2026, we can expect 100 basis points or more of gross margin expansion just as IMG normalizes. From there to the 15% at $250 million in revenues, Greg, how would we build that layer cake? What are the specific contributors, whether it be something in weld month, something in gas panel, etc.? Can you help us just understand how we go from 12-ish% up to 15%? Thank you. Sure. Thanks, Craig. It is a couple of things. It is still continued on the conversation around improving our proprietary products. That is going to be, as Phil mentioned, our key strategy to drive. As that moves through the year, that will keep being one of the biggest levers that we have. Phil also, in his comments, talked about our global operations footprint that we are rationalizing as we move through that. We will see some improvements later in the year, but not incremental. That will be more of a 2027. We are working on driving efficiencies that will help move that through. Not only on the branded product and the leverage of our factories, but driving incremental revenue from our machining business, which garners obviously a higher product margin than our integration business and getting that mix up as a higher percentage of the business. That's helpful. The follow-up question, and it may be that you've covered some of it. In Phil's prepared remarks, he characterized calendar 2026 as a year of transition. I was just hoping to get further color on what the elements of the transition were and what was targeted to achieve in 2026 vs elements of a transition that might start in 2026 and then yield more benefit in 2027 and beyond. Thanks, guys. Yeah, as Greg kind of mentioned earlier, I would say it's three major levers. First and foremost is getting all of our products into volume, getting them at the cost targets. And quite frankly, expanding those products across more and more customers. I think we talked about on our last call, in particular, we slowed down one of the qualifications because we quite frankly weren't ready for the ramp. We are going to be ramping that product and that customer through the first half of the year, which will increase our touch points with additional customers in terms of our proprietary products. Second, as Greg mentioned, in particular, our global operations and our global footprint. We are going to be doing work to making sure our products are made in the right location for the right margin. Also, that will help us from a flexibility standpoint. If you think of it this way, we want to use our machining business within North America to drive our quick turn. That quick turn is going to be our revenue growth for our long term, if that makes sense. Our next question comes from Krish Sankar with TD Cowen. You may proceed with your question. Hi, this is Robert Merton's online for Krish. Thanks for letting me ask a few questions. I think you had previously mentioned some friction in your hiring process for the machining business. Could you just provide an update on where you are in that business in terms of current capacity and that which would be needed to service demand in a more normalized demand environment? Yeah, we talked last quarter that we need to get the hiring up in our Minnesota factory in particular. We have met those hiring targets. As we see increased demand for those products, though, what we will be doing is increasing our capacity by bringing on both our Malaysia footprint as well as our Mexico footprint, building some of those same products. Great. Thank you. That's helpful. Last quarter, you mentioned qualifying a third customer in your internal valve system, and we're engaged with the fourth customer. Do you have any update at this time? You You can provide us on where you are in the qualification phase and sort of the rate of adoption you're expecting for these customers going internally sourced products. Yeah, that's what I was alluding to in my comment on the last question. In particular, we believe that fourth customer will come online in the first half of next year in terms of our valve supply. Okay. Thank you. Our next question comes from Edward Yang with Oppenheimer. You may proceed with your question. Thanks, gentlemen. Just to clarify, are we past all the hiring and retention challenges in the U.S. machining operations? It's nice to hear you got the hiring up. How were you able to hit those targets? Yeah, I think we talked about in the past about different incentive programs we put in place in order to get the hiring programs in line. We are on track, and we've met all of our hiring requirements for our Minnesota factory. What I will say is, as we see these products expand, we will be duplicating resource requirements in lower cost regions as well. Okay. And just a follow-up question for you, Phil. How does your prior perspective as CTO, would that be helpful for you in alleviating some of these execution issues that we've seen, which were more manufacturing related? When you talk about 2026 being a year of changes, does that mean again that you're going to focus a little bit more on the R&D side versus manufacturing or operations? Or am I reading too much into it? Again, you coming from the CTO position to CEO. Quick answer is yes. What I will say there is Jeff has talked about in the past some of the growing pains we've gone through. As As we transition from more of a services business to our products business. My perspective as being one of the architects of the products business is how we grow our operations with our products is going to be very, very important as we move forward. That was one of the key milestones, the key things we need to get done in 2026 is making sure our product transitions are very, very smooth going forward. Yeah, I would just as a comment on Phil. Phil has obviously been in so many different roles within the company, but he has been deeply engaged in driving. The alignment of cost targets with what we need to do. It is not new to him by any way, shape, or form. This has been a real big team effort, and he's been a critical player in that. Okay. Thank you. Our next question comes from Christian Schwab with Craig-Hallum Capital Group. You may proceed with your question. Great. Thanks for taking my question. With Q4 being the trough for the year, as we're kind of thinking about 2026, would you expect year-over-year growth in 2026 versus 2025? Yeah, I definitely bet that's our current view without guiding the whole year. Next year is, I think, where we are anticipating growth. I mean, we just said that Q1 should be better than Q2. Q4 Q4 is the trough, and then it may be relatively flattish in the front half. We'll see how that works out. Generally, as you know, Christian, things start to pull forward, but we do see right now in alignment with what others are forecasting, customers are telling us back half of the year is going to be very strong. With that in mind and getting to the target of $250 million then run rate in the back half, is the internal plan to be able to hit the mid-teens gross margin goal in the second half of 2026, I mean? Yes, Christian, that is the plan. That's what the operations is putting together right now. Okay. Great. My last question then. We discussed an aspirational goal of vertical integration driving a gross margin of 20%. Is that still the aspirational goal that you guys have in mind? Yeah, long range, that is still our aspirational goal. Flow control is really going to be the enabler for us to get from that mid-teens to that 20% gross margin. Great. No other questions. Congrats, Phil, on your new job and Jeff, best wishes. Thanks. Thank you, Christian. Thank you. This now concludes our question and answer session. I would like to turn the floor back over to Jeff Andreson for closing comments. I want to thank you for joining us on our call this quarter. I'd also like to thank our employees, suppliers, customers, and investors for their ongoing dedication and support over my last eight years at Ichor. Phil and Greg will look forward to our next quarterly update in early February for our fourth quarter earnings call. Operator, that concludes our call. This now concludes our conference for today. Thank you, everyone, for your participation. You may disconnect your lines and have a wonderful day, ladies and gentlemen.