Good day, ladies and gentlemen, and welcome to Keysight Technologies' Fiscal Second Quarter 2025 Earnings conference call. My name is Tamia, and I will be your lead operator today. If at any time during the conference you need to reach an operator, please press star zero. This call is being recorded today, Tuesday, May 20, 2025, at 1:30 P.M. Pacific Time. I would now like to hand the call over to Paulenier Sims, Director of Investor Relations. Please go ahead, Ms. Sims. Thank you, and welcome everyone to Keysight's second quarter earnings conference call for fiscal year 2025. Joining me are Keysight's President and CEO, Satish Dhanasekaran, and our CFO, Neil Dougherty. The press release and information to supplement today's discussion are on our website at investor.keysight.com under Financial Information and Quarterly Reports. Today's comments will refer to non-GAAP financial measures. We will also make reference to core growth, which excludes the impact of currency movements and acquisitions or divestitures completed over the last 12 months. The most directly comparable GAAP financial metrics and reconciliations are on our website, and all comparisons are on a year-over-year basis unless otherwise noted. We will make forward-looking statements about the financial performance of the company on today's call. These statements are subject to risks and uncertainties and are only valid as of today. We assume no obligation to update them and encourage you to review our recent SEC filings for a more complete view of these risks and other factors. Lastly, management is scheduled to participate in an upcoming investor conference hosted by Baird. I will now turn the call over to Satish. Good afternoon, everyone, and thank you for joining us today. During the second quarter, Keysight delivered revenue of $1.3 billion and earnings per share of $1.70, both of which exceeded the high end of our guidance. This marks the second consecutive quarter of revenue growth driven by continued momentum in CSG and return to growth in EISG. The demand environment was solid in the quarter, with orders growing 8% year-over-year and 4% sequentially to $1.3 billion. Even as we are monitoring the overall macro environment, we enter the second half with a healthy pipeline of opportunity and strong customer engagements. Neil will have more details on the tariff impact in his remarks. Overall, our business results demonstrate the resilience of our business and the durability of our financial operating model, which is underpinned by a flexible cost structure, supply chain, and operating capabilities that allow us to quickly adapt to external dynamics. As a result of our multi-year investments, we have a diversified global supply chain, which is largely based in Southeast Asia with minimal exposure in China. Despite the near-term uncertainty, we're confident in our market leadership, the strength of our operating model, and our ability to generate value for our stakeholders. Our capital allocation priorities have not changed. We are investing for the long term while also pursuing a balanced return of capital enabled by our strong free cash flow conversion. Over the past 12 quarters, we have returned over $1.7 billion, or roughly 50% of free cash flow, to investors via repurchases. Turning to business segments, in CSG, commercial communications orders grew double digits. Demand remains robust in wireline, where the ongoing data center infrastructure expansion is driving order strength. We saw continued deployment of 400 and 800 Gb Ethernet technologies in AI data center applications. R&D investments in 1.6 Tb electrical and optical technologies, as well as expansion of new protocols in AI data center networks, are fueling demand as the entire industry is innovating and developing new applications and services. This quarter at OFC, we demonstrated the industry's first solution for 448 Gb per lane optical transmission, a key building block in the deployment of 1.6 and 3.2 Tb networks. The depth and breadth of Keysight's capabilities in the electrical and optical and wireline protocol stacks positions us well to enable ongoing innovation in high-performance computing, memory, and networking. Wireless orders grew in Q2. We saw a steady pace of R&D activity related to 5G advanced and early 6G research, as well as investments in non-terrestrial networks. While smartphone supply chain activity remained stable, innovation and investment in R&D in radio access networks continued to grow. Keysight's new digital twin and system emulation capabilities are enabling non-terrestrial applications and expanding our customer engagements. In aerospace, defense, and government, orders grew this quarter driven by strength in the U.S. and Europe. Ongoing investment in spectrum operations and space applications drove growth. Although the U.S. will be operating under a continuing resolution for most of the year, overall demand and pipeline of opportunities remains robust, with prime contractor backlogs at record levels. Investments in defense modernization remain a top priority for many countries, as reflected in the increased budget proposals in the U.S., Europe, and Asia. Keysight is a trusted partner in this ecosystem, delivering advanced high-fidelity test capabilities that simulate real-world electronic threats in lab environments. This quarter, Keysight won a notable deal with a major defense agency in Europe to modernize its testing capabilities for antenna radar applications, which are key to mission-critical applications. Our innovation pipeline is driving a steady cadence of new products and solutions, which this quarter included higher frequency extensions to our phase noise analyzer for defense applications and a new digital communications analyzer for 224 Gb transceiver tests, enabling wireline and general-purpose use cases. Turning to Electronics Industrial Solutions Group, the demand environment remains mixed while the revenue returned to growth after six quarters of decline. In semi, the demand for our wafer test solutions from large foundry and IDM customers remained strong. Leading-edge process node investment was augmented by rapid growth in high-bandwidth applications. Customer engagements for silicon photonics co-packaged optics accelerated within the quarter as the industry works to address performance limitations across latency, bandwidth, and power in the AI data center. In automotive, while orders and revenues were down, the business has largely stabilized. Engagements with OEM customers remain steady, with investments in software-defined vehicle capabilities, including cybersecurity, radar scene emulation, and ADAS chipset development. This quarter, we secured a key win with a major automotive OEM for design and test of their home energy management systems. General Electronics orders grew for the third consecutive quarter, although at a lower rate. Growth in multi-industrial and medtech customers for both R&D and manufacturing solutions was partially offset by contraction in U.S. education funding and continued normalization in the distribution channel. Moving to software, design engineering software orders grew double digits, reflecting a healthy demand for our RF EDA solutions. We're seeing growing interest from industrial customers looking to apply simulation and virtual prototyping in the mechanical domain. With respect to our recent ESI acquisition, we're enabling next-generation industrial design by delivering a panel forming solution to a large European auto OEM that will drive efficiencies through their manufacturing processes and optimize their production timelines. In closing, we're pleased with the recovery that's underway. Our end markets have largely performed in line with our expectations heading into this year, and I'm once again proud of the Keysight team's execution in this quarter in what remains a dynamic environment. Keysight's broad portfolio of differentiated solutions positions the company to outperform in a variety of market environments. We continue to make deliberate multi-year investments aligned with long-term technology trends, creating opportunities now and into the future. As we move through the second half, we remain focused on executing on what we control and continuing to deliver value to our customers and stakeholders. With that, I'll turn it over to Neil to discuss our financial performance and outlook. Thank you, Satish, and hello, everyone. Second quarter revenue of $1,306 million was above the high end of our guidance range at 7% on a reported basis and 8% on a core basis. Orders of $1,316 million were up 8% on both the reported and core basis. Looking at our operational results for Q2, we reported a gross margin of 65%. Operating expenses were $516 million, up 4%. Q2 operating margin was 25% and increased 100 basis points over last year. Turning to earnings, we achieved $295 million of net income and delivered earnings per share of $1.70. Our weighted average share count for the quarter was 173 million shares. Our Q2 results included approximately $7 million of new tariff expenses in cost of sales, which had a 60 basis point unfavorable impact on both gross and operating margins and resulted in an approximately 4-cent reduction in earnings per share. Moving to the performance of our segments, the Communications Solutions Group generated second quarter revenue of $913 million, up 9% on a reported and core basis. Commercial communications revenue of $612 million was up 9%, reflecting sustained strength in wireline and growth in wireless. Aerospace, defense, and government achieved revenue of $301 million, an increase of 9%. Altogether, CSG delivered 67% gross margin and 26% operating margin. The Electronic Industrial Solutions Group generated $393 million in revenue, an increase of 5%, with growth in semiconductor and general electronics more than offsetting a decline in automotive and energy. EISG delivered 59% gross margin and 23% operating margin. Software and services accounted for approximately 36% of Keysight revenue, while annual recurring revenue was 28% of total mix. Moving to the balance sheet and cash flow, we ended the quarter with $3,118 million in cash and cash equivalents, generating cash flow from operations of $484 million and free cash flow of $457 million. In April, we issued senior notes for an aggregate principal amount of $750 million. We intend to use the net proceeds for general corporate purposes, which may include partially funding the previously announced acquisition of Spirent. With regard to pending acquisitions, the U.K. Competition and Markets Authority cleared the Spirent transaction in March. We are progressing through the review process with other regulatory agencies and expect the transaction to close in Keysight's third fiscal quarter. In addition, the acquisition of Optical Solutions Group and Power Artist is anticipated to close shortly after the Synopsys Ansys transaction is completed. Lastly, we repurchased 1,042,000 shares this quarter at an average price of approximately $144 for a total consideration of $150 million. Now turning to the current environment, tariffs and our outlook. We have a diversified global supply chain with minimal exposure to China and have already taken action across multiple vectors to reduce the incremental impact of tariffs. Our multi-pronged mitigation approach spans our global manufacturing footprint and sourcing strategies, as well as pricing and cost actions. Based on actions taken to date, we estimate our annual exposure at approximately $75-$100 million. We are working to further reduce this exposure and offset any remaining impact. Given the high priority that we place on maintaining our long-term customer relationships, our pricing actions were not applied to pre-tariff backlog. As a result, and assuming tariff rates remain at the current levels, the most significant tariff impact is expected in Q3 with full mitigation by the end of the fiscal year. Keysight currently has $2.4 billion in backlog and enters Q3 with a solid scheduled shipment position, despite the dynamics and uncertainty of the current macroeconomic environment. As Satish mentioned earlier, at this point, we have not seen any material adverse effects on demand from tariffs and are therefore raising our full-year growth expectations. We now expect FY25 revenue growth at the midpoint of our 5-7% long-term target and annual EPS growth slightly above our long-term 10% target. For the third quarter, we expect revenue in the range of $1,305 million-$1,325 million and Q3 earnings per share in the range of $1.63-$1.69 based on a weighted diluted share count of approximately 173 million shares. Implied in this guidance is the assumption that tariffs remain at current levels for the year. With that, I will turn it back to Paulenier for the Q&A. Thank you, Neil. Operator, will you please give the instructions for the Q&A, please? Ladies and gentlemen, if you would like to ask a question, press star one. We ask that you please limit yourself to one question and one follow-up. To withdraw your question, please press star two. Please hold while we compile the Q&A roster. The first question comes from Tim Long with Barclays. You may proceed. Hi, Tim. Hi. Maybe one and then a follow-up. If we could just go back to AI, I know you guys have been giving us examples each quarter of where you guys are seeing traction. It seems like across the hardware ecosystem and emulation simulation as well. Could you just kind of update us on what kind of new activity you're seeing there and how meaningful it is for the business? On the follow-up, if you could just give a little bit more color on the orders and pipeline to get to the full-year guidance. I think normally we do see orders pick up towards the second half of the year. Just curious what you're seeing in pipeline to give confidence in the second half. Thank you. Thank you, Tim. Obviously, AI, we view it as a long-term secular trend. With a clear multi-year roadmap that's forming and a great fit to our strategy of not only being a physical layer tool provider, but also going up the stack with physical and protocol layer and offering more solutions to customers. The big mega trends are clear, right? We all know the AI workloads are growing, and we're making contributions around a number of technology fronts, including in memory, compute, networking, with new standards that are forming. Our broad portfolio is really in play as we engage with these customers. Where we see the industry right now is trying to solve a number of the scale-up and scale-out challenges as they deploy this digital infrastructure, right? That's the action or activity that's being driven. We had another strong quarter. For the first half, last year, we said our wireline business was roughly $1 billion, so over $1 billion, I should say, in sales. For the first half, it grew double digits. We feel good about our position in this emerging space. We think it's a long-term growth opportunity for us that we're very excited. With regard to the progression of orders and what's baked into our guide, again, look, I think we've said this before, that despite all the uncertainty and chatter out there and the customers are obviously paying attention to all the tariff talks and all the macro concerns, we have not yet seen any material change in customer behavior with regard to their immediate plans. As we enter the quarter, we obviously had a strong finish for Q2. As we enter Q3, our pipeline is solid and supports our guide. We had a pretty strong uptick in pipeline activity as it relates to the second half. We feel good about the second half. Obviously, there are risks that we're monitoring like everybody else, but we're focused on what we control and feel confident about where we stand today. Okay. Thank you. Thank you. Thank you. The next question comes from Matt Nicholson with Deutsche Bank. You may proceed. Hey, guys. Thanks so much for taking the question. One question and then one follow-up. I guess first on my main question, you obviously raised the top line outlook, I guess, on average by about 100 basis points relative to the prior 5%. So I'm curious maybe where you're seeing a little bit of an incrementally improved view relative to three months ago. That's the first question. Second, just to follow up on cash flow from ops, it was meaningfully stronger. I'm just wondering maybe for Neil, anything unique on the working cap side and then maybe how to think about cash flow from ops and working cap over the duration of the fiscal year. Thanks. Thank you. I think, again, as I mentioned before, we looked at the overall performance we've had in the first half. We take a look at our pipeline of opportunities we have, the strong backlog position we have, and we then have applied this to essentially the raised top line expectations for the full year. Again, there are a lot of macro risks and other things people are monitoring, but we have not seen any material change in customer behavior. If you recall, at the beginning of the year, we said we thought this year would be a slow, gradual recovery in our markets. We feel like that's exactly the trajectory we're on. That's where we find ourselves at the end of the first half and feel confident about where we are. Like everybody else, we continue to monitor the risks due to tariffs and the geopolitical environment. Yeah. The only thing I would add to that that Satish just said with regard to our outlook for the year, as everybody knows, we tend to see a seasonal uplift in the fourth quarter. We are still expecting the fourth quarter to be our strongest quarter of the year, and that lends to that guidance increase. As it relates to cash flow, yeah. Obviously, strong cash flow within the quarter. There are a couple of things in there. First of all, that did include a little less, about $60 million worth of a gain on a hedging contract associated with the purchase price for Spirent. We had put a contract in place about a year ago, set to expire at the end of our first half, which was our original thought on the timing of the close of that transaction. We closed out that transaction and essentially rolled it forward. When we closed it out, we did recognize about a $60 million gain on that hedge. In addition, we did see some working capital improvements. Inventory days were down by about 10. DSO was down by about 3. That contributed to the strong cash flow performance, as did significantly lower tax payments than in the year-ago quarter. Thank you. The next question comes from Mark Delaney with Goldman Sachs. You may proceed. Yes. Good afternoon. Thank you very much for taking my question. A bit to better understand the tariff topic, maybe first one, just to level set everyone, including myself, the $75 million-$100 million, is that the gross amount of exposure that you have? The net effect this year is maybe something less than that, or is the $75 million-$100 million what you expect the drag on profits to be for this year? Yeah. $75 million-$100 million is a gross annualized number. Obviously, this thing went into effect in April, so we only have a little less than seven months of total impact. $75 million-$100 million is the gross number. We are working to offset that, although, as we said in our previous remarks, to the extent that we're passing those costs on to customers, we've made no attempt to reprice backlog. Given that we entered Q3 with about $2.4 billion of backlog, it's going to take some time for those offsets to materialize. Relatively little here in Q3, a little bit more in Q4, but by the time we get to Q1, we expect to have those tariff costs fully mitigated. Helpful, Neil. That was what my follow-up was on. If you're not raising price on backlog, maybe you can help us better understand the mitigating actions that you are taking and your confidence in mitigating the tariffs as you exit the year. Thank you. Yeah. I mean, I think as we think about tariffs, we think of kind of two opportunities. One, what are the actions that we can take to reduce our overall tariff exposure, leveraging our global supply chain, leveraging our manufacturing footprint, taking actions to actually reduce tariff costs? Once we get to kind of we've optimized the tariff cost side, the question is, what can you do to further mitigate either by passing those costs on via price or surcharges of some sort, or reducing costs elsewhere in your P&L? We have actions going on across all of those work streams. Now, when I said we're not raising price on existing backlog, right? Essentially, we said, "Hey, if you had orders that were already on our books, we weren't going to go back and try and recover tariffs on those." We have taken actions forward looking on new quotations starting in about mid-April. Yeah. Mark, just to chime in, we have a pretty resilient supply chain operations that is agile, and we have a considerable amount of operational realignments that we can still work on. Because at this point, we're assuming 10% tariff sort of is the base case for us. Should that materially change, we would be prepared to respond to those scenarios as well. Customer pricing and strategies, it's definitely a part of it, but it's also all the other operational alignments that we can make with our partners who we have a multi-year relationship with that can help us scale across geographies if needed. Thank you very much. I'll pass it on. Thank you. Thank you. As a quick reminder, if you'd like to ask a question, please press star one. Please limit yourself to one question and one follow-up only. The next question comes from Meta Marshall with Morgan Stanley. You may proceed. Great. Thanks. A couple of questions for me. Just one, know that your aerospace and defense business is kind of relatively split between kind of U.S. and allies. Just wondering if you had seen any kind of pushback on ally orders that were aligned to U.S. programs or just any commentary you could kind of give on aerospace and defense. Also, just following up on that, noted that you said kind of minimal China impact, but just how much of that $75-$100 of impact that you guys are talking about from a gross perspective is from shipping into China versus shipping into the U.S.? Thanks. Thank you, Meta. I'll take the aerospace defense, and Neil can quantify the China impact. I'll just say that the strong quarter with growth in orders, as I mentioned, even under a continuing resolution that we've been operating under. This is unprecedented that we're still under continuing resolution maybe for the full year. That doesn't limit growth in new programs and such, but we saw some good orders bookings again with our prime contractors in the U.S. and actually had a double-digit order growth in our European business. Just to give you some examples, we were awarded by NATO a FORAX contract, which is public, to modernize radar and electronic support measures. We also were selected by the U.S. Army for validating zero-trust security on the unified network. The spend environment remains strong, especially with the prime contractor backlog. Again, this is a business I want to remind you is always difficult to call on a quarterly basis, but easier to call on a longer term because the trends are clear. We look at it longer term and say the U.S. budget next year is likely to go up. European budgets for defense are likely to go up with the programs being put in place. We feel good about our portfolio position in aerospace defense. Yeah, Meta. And just to get to the question about China, U.S.-China, China-U.S., both directions is less than 10% of total tariff exposure. Okay. Great. Thank you. Thank you. The following comes from Aaron Rakers, Wells Fargo. You may proceed. Yeah. Thanks for taking the question. Two, if I can, I'll just ask them right away as well. First, I think, Neil, as we talk about the guidance and getting up north of that 5% growth or in that 5-7% range that you alluded to, can you just remind us again of how we think about the incremental margin for the company? I think all the way back at the analyst day, you talked about anything north of 5% dropping through like a 40% incremental margin. What I'm trying to get to is just the pace of how we could think back to getting op margin back above 30%. Then as a follow-up, or as the second question, I should say, is that can you talk a little bit about the wireless business? That, I think, previously was talked about as kind of think of that as being stable, but it sounds like that's actually performing a little bit better. How do you think about the durability of that wireless business? Thank you. Yeah. One, and I'll start with the first one here on the incremental. You're absolutely correct. What we've basically said is anytime our business is growing 5% or better, that we would expect to drop through that growth at an operating incremental of about 40%. Now, I would point out that the tariffs are new and substantial incremental costs that are, in the short run, going to impact our ability to deliver on that incremental. Yep. On the wireless business? Yeah. On the wireless business, again, we're continuing, I would say the headline is we're continuing to see stability, strength in the infrastructure side. Still, the smartphone-related businesses, some segments are still soft, especially in China. Still monitoring, but stable, but soft. I would say the real strength is in the network infrastructure side with Open RAN, some of the latest standards releases with AI, and some early 6G research really driving some of the spend and customer engagements. We have a strong position in this space, and we continue to invest for the longer term here to maintain our leadership in the space. Thank you. The following comes from Robert Jamieson with Vertical Research. You may proceed. Hey, good afternoon. Thanks for taking my questions in this quarter. Just quickly on software and services, just it's a growing part of the business, up to 36% of revenue and recurring almost 30% now. Are there any investments that you're making to further accelerate growth here, just given the margin profile of those businesses? No, thank you. Again, a big part of our strategy, and if you look at the business and how we performed in a downturn, as you rightfully point out, is a function of software and services because it has been such a big part of the company's resilience, especially even as top line comes under some pressure. This is clearly the area of focus across all our businesses. We have a strategy to grow the software and services. One particular area we are really excited about, we saw double-digit growth in our simulation business as an example. It is an area where we have placed a lot of M&A dollars and focus. If you remember, we acquired ESI, and now we are also potentially beneficiaries of the Synopsys Ansys transaction where we might get a couple more acquisitions to bolster our presence in the simulation space. It does two things, right? It increases our software and recurring revenue, but equally, it allows us to engage with our customers earlier in the design cycle, which again fits our strategy of being a bigger player in the R&D parts of our market. As recovery does happen in our end markets, you will see that number maybe take back as a percentage of the total mix just a little because we are starting to see some of our core business recover. I think the long term, we still feel like there's more upside to driving the software as a percentage of revenue. Sure. Thank you. And then just on AI, I mean, it's been a consistent theme and growing nicely. But I maybe addressed this earlier, but beyond testing of the high-speed interconnection network infrastructure, are there any other kind of test applications or demand that you're seeing from customers within that realm? Or is that kind of coming from some of the emulation software they mentioned on testing of how compute and latency, etc., is working its way through the data centers as they are reconfiguring things for higher network speeds and things like that? Yeah. I think it's important to characterize this not just as cable test, but it's important to characterize it as the challenges in the digital infrastructure that's being put in place for AI are very different, right? When customers are trying to look at the scale-up and scale-out challenges they face, what might be an interconnect really turns into a mission-critical fail point if it's not performing right, and the cost of failure gets up pretty substantially. We are engaging with our customers on those mission-critical needs that they have today. Equally, from a strategic sense, we're looking at where is the industry going in five years? I can tell you that the state of the art on the technology keeps growing. There's this roadmap that's forming around multiple dimensions, and we're participating in those to enable it. We are there for our customers. What we see is a big trend of pulling in the timelines because of the rapid increase in the AI workload, right? All of this is a pretty rich opportunity for us. We've also, along the way, have design wins in the software emulation space, which allows customers to isolate their performance in the AI data center and say, "Where is the bottleneck to get the true performance?" We're working with them on those as well. Across the board, across physical and protocol layer, we're continuing to grow our contributions to this marketplace. Great. Thank you very much. Thank you. Thank you. The next comes from Rob Mason with Baird. You may proceed. Yes. Good afternoon. Just a couple of questions. On the general electronics business, I'm curious, just given all the realignment of supply chain activity, maybe it's round two versus tariffs the last time, as companies look at where their manufacturing footprints need to reside, can you just speak to maybe the impact on that business from a demand side? Again, I'm maybe thinking more on the production test side if that's an influence. I'll just go ahead and ask my follow-up. Neil, just to think about the tariff impact in the third quarter, is it kind of roughly a doubling of what you experienced in the second? Yeah. I'll take the second one first here. I think it's likely a little bit more than that. We had about three weeks of tariff impact in April versus obviously a full quarter. Now, we have already taken some mitigating actions that are having a positive impact. I don't think you can extrapolate totally forward from $8 million just based on the number of weeks, sorry, $7 million. It is a little bit more than a doubling. It is more than a doubling of what we saw in Q2, just given the time involved. Yeah. I think when you look at the general electronics business, given it's a broad marketplace for us in terms of the number of different types of applications that that end market represents, we see no change in sort of the areas such as digital health and research because those tend to be durable in nature. The manufacturing parts of it do move around. On one hand, China still remains weak in that area. I would say that there's a lot of recent conversations we're having with customers because they're trying to diversify their manufacturing footprint. Now, it's not materially yet reflected in our results, but could be an opportunity for us to engage in that we're working with our customers on. It's still early days, but it's driven by the tariffs and what might happen. There's a lot of scenario planning that's occurring, and it'll probably be playing out over the next 90-180 days. I see. Thank you. Thank you. Thank you. The following comes from Adam Thalhimer with Thompson Davis. You may proceed. Hey, good afternoon, guys. Great quarter. Thank you, Adam. Can you parse through orders a little bit? I'm curious if there was any, to what extent you saw pre-buy activity ahead of any surcharges, and what our expectation should be for order trends after the surcharges went into effect? Yeah. I'd say just taking a look at the orders in Q2, orders progressed fairly linearly in the quarter. The funnel conversion was what we expected. We had a strong intake in the funnel as well, which is what we reflected into Q3. I would say our April was strong, in part because it's the end of our first half for our compensation for our Salesforce. It does tend to have a strong April. No real change. We didn't see any difference in pull-in, pull-outs, or cancellations of anything of that kind. That's why our position is, while customers are watching the macro and evaluating the risk associated with it, we haven't seen any material change in customer behavior. Good to hear. Secondly, I wanted to ask about Asia. The revenue there was really strong in the quarter. Maybe you can just give some high-level thoughts on China demand. Yeah. I would say Asia was strong. Again, it is across all of our segments, really. Commercial communications being the leader, semiconductors saw strong demand as new nodes and new technologies such as silicon photonics are being deployed. General electronics also had some growth in Asia. I would just maybe make a comment about China. Orders were flattish for the quarter in China, with strengths in a few sectors. Clearly, as I mentioned before, the general electronics with the manufacturing exposure was weak, and automotive in China was also weak. We continue to monitor the POS demand, although we have a very small indirect business. We continue to monitor that. It seems largely in line. China, I would say, continues to hold up well in this environment. Thanks, Satish. Thank you. Thank you. The next question comes from Samik Chatterjee with J.P. Morgan. You may proceed. Hi. Thanks for taking my question. Satish, maybe if I can sort of try to. Hi, Samik. Hi. Good to hear from you. On the drivers of wireline demand. Hi, Samik. Yeah. No, thank you. Drivers of wireline demand. I'm trying to sort of address it maybe in terms of how to think about sustainability. And your customers clearly are doing well on volume, but how should we think about the strength you're seeing driven by progress on R&D from your customers relative to maybe sort of what they're seeing on their volume outlook and driven by production? So maybe if you can share any color about, I know communications is very R&D aligned for you, but what does it look like for wireline? And is the demand you're seeing there, are you selling new testers when it comes to either silicon photonics or CPU support, or are you just seeing more sort of customers buying just because their volume outlook is stronger? Anything you can share on that front? And I have a follow-up. Thank you. No, good. That's a great question, Samik. I think I would just say when we looked at our wireline business, say, a year or two ago, we have said the majority of the business R&D, and I would probably put it as 80/20-ish, roughly, as the ratio of R&D to manufacturing. Now, we've probably seen a 10-point swing in the manufacturing in that area, but that's sort of where we are, still heavily R&D-oriented. We are clearly also benefiting from all of the manufacturing activity that's happening as the industry is trying to ramp for digital infrastructure. When I look at the portfolio of products that we service, all the way from early R&D to, call it mainstream or R&D or validation through deployment, whether it is with our AWGs, BERTs, scopes, our silicon photonics, wafer test systems, network analyzers, software with our AI benchmarking, and network-speed emulators. A pretty broad category of products that we're selling to. Actually, as I think about the whole first half, I would say the number of customers that participate in that has also grown for us, which is a good sign that the ecosystem is expanding as more companies are coming in, given that this is going to eventually be a longer-term opportunity. When I look at some of the data trends that are going on and the standards progressions, it really bodes well for our R&D business. We'll have some times when we'll pick up manufacturing demand as well because we have a portfolio, but strategically, the R&D business is more valuable to us. Okay. Got it. For my follow-up, if I can sort of stay with the wireline demand, but more sort of when we think about adoption of technologies like CPU and silicon photonics, I'm imagining sort of visualizing it as more of the test demand moves towards a bit more sort of semiconductor-level testing. Anything you can share there in terms of how you see the competitive landscape? Does it change from what you've had in sort of 400 Gb, 800 Gb? Do you think you have the sort of entire stack to address some of those complexities, or is there something that you need to add to the portfolio to address sort of when the overall sort of technology moves more closer to semiconductor testing? No, you're very astute to pick up the change, right, between electrical to optical or that conversion. It's been an area of emphasis and investment for us, especially as things go into silicon. This is why we invested about 18 months ago to intercept the demand from silicon photonics. We talked about this on a call as well. We're now benefiting from that. That requires bringing together optical capabilities with our electrical capabilities and probing and complex metrology. Really, in our wheelhouse as a company to go after this opportunity, co-packaged optics is another great example of what I saw from customers. I think that's accelerating as well. If we need more capabilities, we can acquire talent. I think we have a strong foundation to start with today that we actually at OFC, we showcased multiple, first in this area, 448 Gb transmission, key enabler of 3.2 Tb, and so on and so forth. We had about 50 demonstrations. It will continue to grow. You're right, this is where the puck is moving to, and we find ourselves having a strong foundation to intercept this. Okay. Great. Thank you. Thanks for taking my questions. Thank you. Thank you. We have a question from Mehdi Hosseini with SIG. You may proceed. Yes. Thanks for letting me ask the question. I want to follow up on the wireline. Satish, I just want to look at the big picture. You talked about the connection is moving from copper to actually moving towards optical. When you look at the entire market for both networking tests as well as the testing that happens with the component and component migrating to optical, would it be fair to say that your content would increase as we migrate from 800 GB to 1.2 TB? If content increases, including both system-level tests and semiconductor, what is the magnitude of the increase? Can you help us qualitatively or quantitatively? I have a follow-up. No, look, I think I don't know that I would say that from what we see that it's either going to be electrical or optical. I think it's electrical for some applications where you obviously have a better sort of economics, and then optical where you need the performance, and it's where the puck is moving to. I think this sort of hybrid is where the solutions are needed. I think being a company that has both technologies, we find ourselves in a really good position across the stack, as you pointed out, memory, compute, networking, so on and so forth. Now, with regard to the magnitude of the opportunity, typically as the complexity goes up, we would see the types of solutions that customers need, especially in early R&D, tend to be more complex, and therefore we're adding more value to our customers as we get there. Now, as those technologies mature, obviously the puck moves to the next one, and therefore the volume may drop on the previous technology. It's always the case that that happens, but the net effect of these overlapping waves of technology is it really supports our long-term growth expectations for the company that we have set to be in the 5-7% range. Okay. A follow-up for Neil. If I just take a midpoint of your revenue growth for fiscal year 2025, assuming that the sequential growth is stronger in October versus July, and embedding the tariff impact into your margin profile, would it be fair to say that there is a slight decline in operating margin from April to July, and it would go kind of sideways from July to October? Your fiscal year 2025 operating margin would be kind of flattish compared to fiscal year 2024? One second. Yeah. I mean, I think as we look forward here, I think we're kind of range-bound, I would say, in a pretty tight range. Obviously, we're going to see, we would expect to see a seasonal uplift here as we move from Q3 to Q4. As always, we would expect the absent tariffs to continue to drive a strong incremental on that flow-through. Okay. Thank you. Yeah. That concludes our Q&A session for today. I would like to turn the call back to Paulenier Sims for any closing comments. Thank you, Tamiya. Thank you all for joining us today. Have a great rest of your day. This concludes our conference call. You may now disconnect.