Welcome to MACOM's second fiscal quarter 2025 conference call. This call is being recorded today, Thursday, May 8th, 2025. At this time, all participants are on a listen-only mode. I will now turn the call over to Mr. Steve Ferranti, MACOM's Vice President of Corporate Development and Investor Relations. Mr. Ferranti, please go ahead. Thank you, Olivia. Good morning, and welcome to our call today to discuss MACOM's financial results for the second fiscal quarter of 2025. I would like to remind everyone that our discussion will include forward-looking statements, which are subject to certain risks and uncertainties, as defined in the Safe Harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those discussed today. For more detailed discussion of the risks and uncertainties that could result in those differences, we refer you to MACOM's filings with the SEC. Management statements during this call will also include discussion of certain adjusted Non-GAAP financial information. A reconciliation of GAAP to adjusted Non-GAAP results is provided in the company's press release and related Form 8K, which was filed with the SEC today. With that, I'll turn over the call to Steve Daley, President and CEO of MACOM. Thank you, and good morning. I will begin today's call with the general company update. After that, Jack Kober, our Chief Financial Officer, will review our Q2 results for fiscal year 2025. When Jack is finished, I will provide revenue and earnings guidance for the third quarter of fiscal 2025, and then we will be happy to take some questions. Revenue for the second quarter of fiscal 2025 was $235.9 million, and adjusted EPS was $0.85 per diluted share. We ended the quarter with approximately $682 million in cash and short-term investments on our balance sheet. The diversity of MACOM's end markets, product portfolio, and global customer base continues to provide us with great opportunities for growth. Revenue by end market were as follows: Industrialand Defense was $98.5 million, Data Center was $72.2 million, and Telecom was $65.2 million. Telecom was up 18% sequentially, Data Center was up 11% sequentially, and I&D was up 1% sequentially. Our I&D and Data Center quarterly revenues achieved record levels. Our Q2 book-to-bill ratio was 1.1x 1. Notably, this was the fifth consecutive quarter of strong bookings, and we are pleased our backlog is at a record level. Our turns business, or orders booked and shipped within the quarter, was around 20% of total revenue. We believe our growth is driven by our new products gaining market share, as well as positive secular trends in certain segments of our three major end markets. Now, turning to the end markets. First, Industrialand Defense demand continues to grow, driven by the U.S. and international DoD system upgrades in radar, EW, and communication systems. The need for higher frequencies, higher power levels, and higher levels of integration within the Defense electronics sector plays directly to MACOM's strengths and enhances our addressable opportunities. Outside of the aerospace and Defense business, demand in our traditional Industrial and multi-markets area, which includes automotive, factory automation, and medical, was unremarkable. Second, Telecom order trends have been improving, specifically in 5G infrastructure, broadband access, and metro long haul. The most active areas of the Telecom market are our SATCOM segment, where we continue to secure design wins in ground and space-based systems supporting broadband connectivity and direct-to-cell applications. Third, Data Center business is strong, continued with demand from domestic and international cloud service providers. We see an accelerated pace of new technology deployments in this market, as well as rapid shifts in demand between various platforms and production. Our Data Center business is on pace to have a strong growth year, although we always like to remind investors that this market is our most volatile end market. During Q2, MACOM had exhibits at two significant industry trade shows, including the Satellite 2025 Conference in Washington, D.C., and the Optical Fiber Conference, or OFC, in San Francisco, California. These large industry events were great venues to demonstrate the full breadth of our technology offerings and to introduce new product lines to our customers. I will take a moment to highlight some key products we displayed. At Satellite 2025, we introduced our new Opto-Amp product line. Our flagship product is capable of producing up to 40 W of optical power. Our Opto-Amp is an all-optical amplifier and has been developed to support free-space optic applications, including satellite-to-satellite links and gateways to satellite links. This new product line leverages MACOM's command and experience with optical amplification, our knowledge and relationships in the space and SATCOM industry, as well as our RF over fiber, photonics, and material science expertise. Opto-Amp utilizes advanced materials like erbium and terbium to achieve high output power and efficiencies. Because of our engineering capabilities and manufacturing scale, I believe this new product line can rapidly gain market share over the next few years. At OFC, MACOM had a total of 17 product and technology demonstrations. One of the major themes at OFC was the maturity of the linear pluggable optics, or LPO, ecosystem. MACOM's booth featured a full ecosystem demonstrating at 100 Gb per lane, consisting of switches from two different vendors, three different servers, and 400 Gb and 800 Gb modules from 12 different module vendors. The multi-mode and single-mode fiber optic link demonstrations ran seamlessly during the show, with bit error rates well below required thresholds. One of the applications for LPO that appears to be gaining traction is server-to-switch links at 100 Gb and 200 Gb per lane. These high-volume short-reach links, which typically involve active optical cables, require very low power consumption. We also unveiled our chip-stacked TIA and photodetector for 800 Gb and 1.6T applications. This solution utilizes four of MACOM's new 200 Gb photodetectors, which are die-stacked onto a MACOM 800 Gb transimpedance amplifier. This solution leverages MACOM's expertise in high-speed signal integrity, ICs, photonics, system design, and advanced packaging. As we have just passed the midpoint of our fiscal year, I would like to update and remind everyone of our long-term strategy. Simply put, we are focused on designing semiconductor-based products and platforms to support the highest power, highest frequency, and highest data rate applications within our three core markets. We estimate our SAM is approximately $7 billion-$8 billion. I'll take a moment to discuss a few fundamental themes of our strategy. First, highest power. Our strategy is to build a best-in-class semiconductor portfolio that will enable commercial and Defense systems to operate at the highest possible RF and microwave power levels. Our portfolio is underpinned by an array of leading proprietary III-V semiconductor process technologies, and we continue to focus on innovation in these areas. Differentiated semiconductor process performance is a critical factor in our product's competitive advantage, and therefore, advanced process development is an important part of our strategic plan. Today's development efforts may not impact our revenue for three or four years, but they are the lifeblood of the future growth of the company. When we think about high power, we don't just think about amplifiers, but a wide range of products like control products, kilovolt capacitors, 50 W to 7 kW transistors, filters, power combiners, TWT linearizers, and receiver protector limiters, just to mention a few. As I just discussed, we have added high-power optical amplifiers to the portfolio, which will be a new growth vector for us. As we focus on future requirements for commercial systems, I'll also highlight that our team is making great progress on the development of our fourth-generation GaN on silicon carbide RF power process, also known as GaN4. We expect this new process will ensure MACOM's next-generation cellular infrastructure products support customers' demands of higher power, better efficiency, and improved linearity. Second is highest frequency. Our strategy is to develop differentiating GaAs and GaN high-frequency processes to support our core three markets. As a reminder, in 2021, we announced a Cooperative Research and Development Agreement, or CRADA, with the Air Force Research Labs on the topic of millimeter wave GaN on silicon carbide. This CRADA led to the release of our first-generation 140-nanometer GaN process, which is in production. Since then, we have been awarded numerous government contracts to support development of advanced millimeter wave GaN. This work has been underpinned by a recently signed second CRADA with the Air Force Research Labs, which focuses on sub-100-nanometer GaN technology. Associated with these efforts, we recently completed the installation of a new Molecular Beam epitaxy, or MBE, reactor at our Lowell wafer fab that gives us the ability to perform advanced semiconductor processing steps, including developing new ways to reduce ohmic contact resistance. A lower resistance equates to higher frequency operation, higher gain, and higher power efficiencies, especially at sub-140-nanometer gate lengths. The reactor is installed and operational, and our team is already developing proprietary processes to create industry-leading ohmic contact performance. I'll note the reactor will also be used on other product lines besides GaN, including X-band BAW filter technology, which is currently in development. Installing and qualifying the MBE is a major undertaking, and our fab, equipment, and technology teams have done a great job executing this project on time and in budget. These U.S.-based activities are complemented with efforts to expand our presence in Europe at MACOM's European Semiconductor Center, or MESC, which has expertise in epi growth, compound semiconductor wafer processing, and IC design. MESC offers leading-edge high-performance HEMT and HBT processes in gallium arsenide, as well as gallium nitride, ideal for microwave and millimeter wave applications. We are seeing an increase in customer adoption of MESC's core products and technologies, and we are gaining market share across Europe and the U.S. Customers are pleased to see MACOM revitalize and scale MESC's capabilities. Our efforts to transfer the current processes from 3-inch to 6-inch production tooling are on plan and should be completed within the next few quarters. Once the transfers are complete, we will initiate an exciting technology development roadmap with the goal of becoming Europe's leading III-V foundry for GaAs and GaN on silicon carbide. In parallel, we expect to expand our European engineering and hybrid manufacturing capabilities to support a wide range of growing European industries. Third is high-performance connectivity. Our strategy in high-performance connectivity revolves around high-speed data transfer over copper and optical fiber. While we often say our solutions are analog-based, in fact, many of our ICs contain significant proprietary mixed signal and digital IP to support complex functionality and performance modes as required by the applications. Our growing team of analog, mixed signal, and digital IC designers have a rich history of advanced circuit design and innovation. Our strategy is to focus on customers building systems for Data Center and Telecom optical networking, emulation and prototyping, broadcast video, and semiconductor testing. In addition, we look to diversify our product portfolio and customer base. We are fluent in NRZ, PAM4, and coherent modulation schemes, and multiple protocols, including Ethernet, fiber channel, InfiniBand, and PCIE, as well as multiple automotive and Industrial standards. For the Data Center, we focus on using advanced high-performance silicon processes and leverage our design techniques to address requirements at 800 Gb, 1.6T, and 3.2T data rates to achieve best-in-class performance in support of next-generation Data Center deployments. Our experienced designers collaborate across multiple design centers to support a single mission: to provide advanced, highly integrated analog and mixed signal IC solutions to help customers solve complex signal integrity problems while moving high-speed data. In summary, our long-term growth strategy revolves around developing high-performance solutions using a wide range of semiconductor technologies and circuit design expertise. We seek to deploy our expertise to provide our customers standard and customized IC solutions that achieve the highest speeds, lowest noise, best distortion, and highest power. Our diverse portfolio is unique to the industry, and we remain focused on growing our business in a differentiated way. Next, I would like to provide an update on the status of Wolfspeed RF Business fab conveyance to MACOM. As a reminder, MACOM acquired Wolfspeed's RF business in December of 2023, and it was estimated it would take Wolfspeed approximately 24 months to prepare the RTP North Carolina fab for transition to MACOM. Our respective teams remain focused on meeting or beating the original timeline. Three specific current events to highlight regarding the fab. First, we believe the transition activities are on or ahead of schedule, and it is possible that we may elect to transfer the fab before December 2025. Second, due to increasing demand, the fab is experiencing high equipment utilization and, in some cases, bottlenecks. To reduce execution risks and expand capacity, we are developing plans to increase the current 4-inch capacity by up to 30% over the next 12- 15 months. We see an opportunity to increase 4-inch capacity with a modest investment by purchasing and installing a short list of used equipment. Third, as part of the original RF business transaction, we established the right of first refusal to acquire the real estate associated with the RTP site. We have exercised our right, and we are facilitating a real estate transaction in which our current landlord of our Lowell location would purchase the RTP real estate and then lease it to MACOM. This real estate exchange will have no material impact on our P&L. To summarize, we are focused on ensuring a smooth transfer of the fab and enabling further growth of the RF business. Before I pass the discussion to Jack, I would like to review a few recent customer engagements which exemplify the diversity and span of our portfolio. We recently received a supplier award from BAE Systems in recognition of our quality and delivery performance. Congratulations to our linear module systems team for this well-deserved recognition. Our lightweight BUs, new 200 Gb Photodetector products, are gaining traction in the market for next-generation Data Center applications. Our sales, engineering, and operation teams have been collaborating to achieve major wins, and we are in the midst of ramping up volume production. We received pilot production orders from a leading European radar manufacturer to support its new large ground-based radar program. Jack will now provide a more detailed review of our financial results. Thank you, Steve. Our Q2 results reflect record revenue levels and strong financial performance, building upon our steady growth in revenue, increased operating income, and ongoing cash generation. Our operational performance has allowed us to maintain a strong balance sheet while continuing to generate cash, which we believe positions us well. Fiscal Q2 revenue hit a new quarterly record of $235.9 million, up 8.1% sequentially, based on growth across all three of our end markets. Notable double-digit sequential growth within Data Center and Telecom were the primary drivers. Our overall book-to-bill ratio for Q2 was again above one, with customer orders exceeding our revenue by approximately 10%. Adjusted gross profit for fiscal Q2 was $135.6 million, or 57.5% of revenue, in line with the past few quarters. Total adjusted operating expense for our second quarter was $75.8 million, consisting of research and development expense of $50.4 million and selling general and administrative expenses of $25.4 million. The sequential increase in adjusted operating expense compared to Q1 was primarily driven by higher R&D and marketing costs, as well as employee-related costs associated with calendar year payroll tax resets and variable compensation. As we are scaling the business, we have added new capabilities and resources, primarily within R&D functions, including those from the recently completed and previously announced ENGIN-IC acquisition. I would like to note that we remain very focused on controlling our OpEx as we continue to grow our revenue. Depreciation expense for fiscal Q2 2025 was $6.8 million compared to $6.7 million in Q1 2025. Adjusted operating income in fiscal Q2 was $59.8 million, up 8% sequentially from $55.4 million in fiscal Q1 2025. For fiscal Q2, we had adjusted net interest income of $6.4 million, which increased $500,000 sequentially from $5.9 million in Q1. Our adjusted income tax rate in fiscal Q2 was 3% and resulted in an expense of approximately $2 million. Our net cash tax payments were approximately $2.8 million in Q2. We expect our adjusted income tax rate to remain at 3% for the remainder of fiscal year 2025. As of April 4th, 2025, our deferred tax asset balances were $213 million as compared to $212 million at the end of fiscal Q4 2024. We anticipate continued utilization of our deferred tax asset balances through the remainder of 2025 into fiscal 2026 and beyond. Our utilization of these deferred tax asset balances, as well as other items, will help to minimize our future cash tax payments. I would like to highlight that based on our continued and increasing profitability, we currently estimate our adjusted tax rate will increase in the future. We anticipate our tax rate will begin to rise from 3% to mid-single digits as we progress through fiscal year 2026. Fiscal Q2 adjusted net income increased approximately 8% to $64.3 million compared to $59.5 million in fiscal Q1 2025. Adjusted earnings per fully diluted share was $0.85, utilizing a share count of $75.7 million shares compared to $0.79 of adjusted earnings per share in fiscal Q1 2025. We continue to make operational improvements within the business, which can be seen in the sequential increases in our adjusted operating income and EPS over the past seven quarters. Now, moving on to operational balance sheet and cash flow items. Our Q2 accounts receivable balance was $131.4 million, up from $91.8 million in fiscal Q1 2025. The increase in our AR balance was driven by higher Q2 revenue, as well as revenue timing during the quarter, with more revenue being recorded later in the March quarter as compared to our December quarter. Our day sales outstanding averaged 51 days, which we feel is within our normal operating range. Inventories were $209.3 million at quarter end, up sequentially from $198.4 million. Inventory turns increased to 1.9x from 1.7x in the preceding quarter. We have continued to make strategic investments in inventory to support key programs and feel our growth in inventory over the past year is in line with our overall revenue growth. We remain confident that the quality and mix of our inventory is strong and supports our strategic plans. Fiscal Q2 cash flow from operations was approximately $38.7 million, down $28 million sequentially, and an increase of more than $20 million over the fiscal Q2 2024 time period. The sequential decrease was primarily due to working capital increases. Given the dynamics of our growing business, it is typical to have variations in cash flow from quarter to quarter. MACOM's proven business model has, over the last few years, demonstrated strong cash flow from operations. As an example, in fiscal year 2023, our cash flow from operations was $167 million. Fiscal year 2024 was $163 million, and we believe we are on track for our cash flow from operations to be in excess of $210 million for fiscal year 2025. Capital expenditures totaled $8.2 million for fiscal Q2, up $2.9 million sequentially. Much of this increase is driven by upgrades to our wafer foundry and R&D facilities. We expect our capital expenditures to be approximately $30 million for the full fiscal year 2025. Next, moving on to other balance sheet items. Cash, cash equivalents, and short-term investments for the second fiscal quarter were $681.5 million, up $25 million from Q1. Comparing our cash and short-term investments to the book value of our convertible notes, we are in a net cash position of more than $182 million as of April 4th, 2025. We are aware of the increasing macroeconomic uncertainty impacting the global business environment. We maintain a strong balance sheet with ample cash to support our strategic goals. We continue to carefully manage our discretionary spending and capital spending to help drive improving margins and cash flow over the long term. In summary, I'm pleased with the company's performance and accomplishments during the first half of fiscal year 2025. We will execute our financial goals as we continue down the path of building a company to support annualized revenue in excess of $1 billion while further improving our operating margin, EPS, and cash flow. I would like to thank the entire MACOM team for their support and look forward to the remainder of fiscal year 2025. Steve, now back over to you. Thank you, Jack. MACOM expects revenue in fiscal Q3 ending July 4th, 2025, to be in the range of $246 million-$254 million. Adjusted gross margin is expected to be in the range of 56.5%-58.5%, and adjusted earnings per share is expected to be between $0.87 and $0.91, based on $76.5 million fully diluted shares. We expect sequential growth, revenue growth in all of our end markets. We anticipate that Industrialand Defense will lead with approximately 10% sequential growth, followed by Data Center at 5% sequential growth, and Telecoms slightly up sequentially. As Jack noted, we acknowledge the increased uncertainty in the markets. Nevertheless, we have an amazing product portfolio, a sound long-term growth strategy, and we continue to focus on execution to capture market share. I would now like to ask the operator to take any questions. Thank you. Ladies and gentlemen, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. As a reminder, in the consideration of time, please limit yourself to one question and one follow-up. Please stand by while we compile the candidate roster. Now, first question coming from the line of Tori Stenberg with Stifel. Your line is now open. Yes, thank you, and congratulations on the strong results here. Steve, so your Data Center business is on track to growing, I think, close to 50% or above 50% this fiscal year. You've talked about this business being quite volatile. What's your current read on the market, and do you think this growth momentum can sustain going into fiscal 2026? Great. Thanks for the question, Tori. And you're right to observe that our Data Center business has been growing. In fact, it's really been growing since 2018, year-on-year. More recently, in our fiscal 2023, we had about 6% year-over-year growth, and then in our fiscal 2024, about 35%. And here we are halfway through fiscal 2025, and I would say we're on track to be somewhere in the mid-40% year-over-year growth range. A lot of that is coming from the movement within the Data Center to go to the higher data rates. A lot of that is being driven by the adoption of the 100 Gb per lane platforms across multiple data rates, including 800 Gb, SR8, 400 Gb, SR4, and even some early adopters at 1.6T. Generally speaking, we think those trends will continue. As a tailwind, we do see that the industry is beginning to seriously look at LPO. I think the industry sort of hit a milestone in March at OFC when it ratified the LPO standard within the MSA. Just to remind everybody, there is an industry organization that is helping define the interface standard for LPO solutions. A specification was released in March. It is basically an Ethernet-based single-mode link at 100 Gb per lane. It allows the switch and the NIC and the module manufacturers to understand what the interface specs are. Now that that is settled, we believe over the next year to two years, LPO will become a mainstay in a variety of applications. We believe if that happens, then we could continue to see strong growth. With all that said, I would just also highlight, as I did on my script, this is a very volatile market. We have seen examples of fast-moving ramp-ups and ramp-downs during this year, and we would expect that type of volatility to continue. From our point of view, we have to continue to be on that leading edge of high data rate. We have to introduce new products. I talked about our 200 Gb Photodetector, how we're now mounting those devices on our TIAs. We're also working on lasers. On our last conference call, we talked about the efforts that MACOM is making with CW lasers. A lot of moving parts. I would probably not recommend investors or analysts to expect continued growth at these growth rates. We think that over the long term, things will settle down into a more rational growth rate. That's great, color. Thank you for that. As my follow-up, I had a question on the Wolfspeed RF fab transition. We're about six months away here. Sounds like things are ahead of schedule. Just trying to get an understanding of some of the gross margin impact as that transition happens here in about six months, especially given your comment that things are running ahead of schedule. Yes. Maybe we'll do a two-part answer. I'll take the front end of that with some comments, and then Jack can also add some commentary. When we originally acquired the business, we highlighted to investors that the overall business had very low profitability. The gross margins were very low. We did a lot of work before we closed the deal to restructure and adjust the OpEx so that on day one, the business would be accretive to MACOM's P&L, although it would be dilutive to the gross margins. You saw that come into fruition back in 2023 in that first quarter where we had a step back in gross margins. Since then, over the past 17-18 months, we have been incrementally improving the margins, the gross margins. We always had a goal that when that fab transferred, it would be neutral or positive to our gross margins. I would say that today we're not there. I think we have more of a gap to close in terms of looking at yields, looking at throughput cycle times, and things of that nature. I do think that there is a gap. It's not easy for us to say what that gap is right now because we're not running the fab. We only have our models, which I think are very good. I would say that we still have a little bit of work to do. Certainly, we have more time to do that, as you highlighted, the fab would be conveying maybe between now and year-end. That work will continue after the fab conveys. The last thing I'll say before I turn it over to Jack is we established a model where this transaction would pay for itself in three years. We are on or ahead of plan to make that happen. The cash generation from this transaction has been very positive. Jack, do you want to go a little deeper on the gross margins? Sure. I think I would just add, as Steve had mentioned in his prepared remarks, there is increasing demand on the fab down there. We are looking to expand the capacity. I think as things continue to transition for us where we can take effectively more control when the fab is under our direction, we'll be able to make further improvements from an overall gross margin perspective. Hopefully that helps. More to come as we work our way through the remainder of the calendar year. Thank you. Now, our next question coming from the line of David Williams with the Benchmark Company. Your line, is now open. Hey, good morning, and thanks for taking my questions here. I guess, maybe Steve, first, you talked a little bit about the volatility and the changing trends that happened within the Data Center. I guess from a bigger picture, how are you seeing the budgets kind of play out this year? Maybe what are your expectations for next year in that Data Center, especially where you're positioned? Where do you think you're going to see the largest growth opportunities there, maybe by technology? We do see continued trends that the ISPs are continuing to invest in Data Centers. That's a positive trend that we think will continue into next year and even the year after that. That's number one. Number two, we also are seeing a high level of innovation within the platforms that we service. You hear things like CPO and NPO and LPO and all of these different variations of how to connect high-speed data. As a merchant supplier, we're sticking ourselves right in the middle of that conversation, whether we're talking with somebody that's in compute or whether somebody is building a server or a switch or a module. We want to bring to them not only high-speed electrical solutions, but also optical solutions. Whether they make those short-reach connections using copper cable or optical cables or fiber optic links, we want to be involved in that. We think that the SAM within the Data Center for MACOM is growing. Because of that, we think that there's still tremendous room to grow in the future. We, of course, have to pick and choose our battles. We have to make sure we have the right product at the right time. We have to remain competitive on a lot of different levels in terms of performance, cost, producibility, time to market. It is an exciting place to be. We are not short of opportunities. We do think that we will continue to grow and gain market share in the Data Center. Great. Thanks for that, color. Maybe just secondly, the satellite business, it sounds like you are continuing to gain some nice traction there. Just wondering if you can kind of size the magnitude of what you think your opportunity is there. Maybe just any color around how quickly that market is developing would be helpful. Thank you. Thanks. Thank you, David. The SATCOM business for MACOM is continuing to grow. It has been growing over the past few years. We expected more good things in the future. Maybe I would just highlight an example of increasing our SAM within that market by adding new product lines. I talked about the Opto-Amp, which is a high-power optical amplifier that is suitable for gateways or onboard satellites to have a free space optical link, which will not only provide data streaming from satellite to satellite, but also location, position, and other overhead that is necessary to run the network. We are very excited about doing things like that, bringing unique, difficult products to bear, helping our customers find solutions. I think that Opto-Amp is just a really good example of adopting new technology, coming up with unique circuit designs so that we can support our customers. The other thing I'll highlight in the SATCOM market, which is historically, a lot of the links have been at Ku- band, which is about a 10 GHz-13 GHz, maybe 14 GHz frequency. What we're seeing is a lot of the newer satellite networks and the connectivity is moving up to Ka- band, which is in that 30 GHz range, as well as Q- band and V- and, and to throw another one out there, W- band. These are all very high frequencies, 40 GHz, 50 GHz, and even 65GHz, 70 GHz. There are very few companies in the industry that can provide chips for these networks. In addition to that, there's very few companies that can build modules or subsystems or help a customer close a link at these frequencies. We're one of those companies that can do that. When we go to market and we think about the SATCOM opportunity, we think about optics, we think about power, RF power, and we think about very high frequencies. These play to our strengths. We think that the opportunity size is actually very attractive. We're always hesitant to put a number on it because it depends on where you draw the line. I would say that we are continuing to invest our R&D dollars to support the opportunity. Thank you. Our next question coming from the line of Karl Ackerman with BNP Paribas, your line is now open. Yes, thank you. Steve, I'd like to go back to that comment or comments on SATCOM. I was hoping you could address the timing of the previously announced $55 million SATCOM and whether you have greater clarity on the opportunity for the program to expand additional $25 million. I guess as you address that, perhaps you could discuss the breadth of design wins and size of the SATCOM business within your Telecom business today. Now, I have a follow-up, please. Sure. So the large contract that we announced about a year ago, we explained that there were sort of two phases. The first phase is an R&D phase where we were doing a wide range of chip developments. I think there's between 10 and 15 specific chips that we are designing for that platform. We're pretty much, I would say, three quarters through that phase. Things look great. We're having some amazing results from our chip designers, and they're hitting the specs they need to hit and things like that. Now we're moving into more of a build phase and getting our EMs or Engineering Models built up and delivered to customer and going through sort of a certification phase. What will follow after that will be a ramp in revenue and production. We expect that that's probably about six months away. Probably starting towards the end of this year, beginning of next year, depending on how things go. I would say generally that large program is on track. I don't want to comment on the potential follow-on of that $25 million additional modules. I really just don't want to comment on that at this point. We're very focused on executing the program we're on. If there are announcements that need to be made on that later, we will certainly do that. I would say, generally speaking, that program is on track, and the team is doing a great job. In terms of some of the other questions you had about the overall size and other opportunities, I will just say that we are continuing to see new companies enter the market. They have different approaches to solving communication, sensor, and networking problems. We are, again, inserting ourselves and providing lots of semiconductor content. Perhaps one example would be you are starting to see more and more networks adopt direct-to-cell connectivity, which means the LEOs or the MEOs are going to have connectivity directly to your cell phone. If you can imagine that MACOM is a big supplier into the cellular infrastructure market, we understand what's necessary to have an efficient transmitter or receiver in a base station. We're bringing that same knowledge to bear to our satellite customers, and they love it. They like the fact that we understand the protocol, we understand all the different bands, we understand how to make these products work. We have the space heritage, so they're embracing us to help them solve the direct-to-cell issues. Got it. Thank you for that. I want to pivot to Defense. You indicated that Industrialand Defense should grow 10% sequentially. Perhaps both of those markets are growing with Industrial maybe appear to be bottoming. Within Defense, I was hoping you could address what your exposure is to European Defense spending directly or indirectly. I ask, given your very large Defense business and certainly growing government interest to expand Defense spending globally. Thank you. Thank you. Our direct exposure to European Defense spending is growing, and we see that as a good thing. Part of our long-term growth strategy was to build out a stronger presence in Europe. Really, the catalyst for that was the acquisition of a small wafer fab based right outside of Paris, France. That has given us a great platform to work with customers across Europe to support their programs. Historically, that business had about 50% of its revenue come from foundry business, meaning the customers designed the chips, and the other 50% was product-based. The 50% that was foundry-based was primarily coming from European Defense contractors. When we completed that acquisition, it gave us really sort of a running start and an instant relationship with a lot of companies we had not done business with. Over the last two years, we have been developing those relationships. We have been improving the performance of the MESC facility. We have been introducing a lot of our U.S.-based technologies, including optical technology and GaN on silicon carbide. All of these things are starting to fall into place and will generate future growth. As I highlighted in my comments, we recently received a very significant pilot order to support a large European radar program. We expect more good things to happen. We expect that exposure will increase. In Europe, they do not have the depth, in my opinion, that the U.S. has in terms of the capabilities on the RF and microwave side. They are looking for companies like ours to set up shop and support them. That is exactly what we plan on doing. I'll add that we will use our MESC facility as a foundation to build higher-level solutions for our customers, not only on the Defense side, but also on the space side. Thank you. Our next question coming from the line of William Stein with Truist Securities. Your line is now open. Great. Thank you for taking my question. Congrats on the good results and outlook. I'd like to start by asking about the Telco and market broadly. It seems to me, by my less trained eye, that this was the end market that drove the majority of the upside in the quarter. I recognize that revenue performance in that end market over the last few quarters has been relatively depressed. Was this a matter of sort of true end market demand, or was this more a matter of inventory through the supply chain having been consumed and we're starting to grow from that? Maybe you could clarify which of those two dynamics is really driving this. Sure. Maybe just a few words on the Telco. You're right that it had a great quarter in Q2. I would say that if you compare our current run rate, we should start to get into a range where we're having record Telecom revenues on a yearly basis. We're very happy about that. From a market segment point of view, I would just highlight that the 5G market, generally, if we listen to the major OEMs, they're saying that business is relatively flat. Nevertheless, we continue to grow our business by gaining market share, introducing more products to these same customers. That has been a tailwind for our 5G business. Second, we put SATCOM inside of the Telecom number. That is also a big driver of some of the growth that we are seeing. Regarding inventory, I would say that there are some segments of the Telecom market that have pretty much gone through and burned down their inventory. One of them would be cable infrastructure. We are starting to see an increase in orders, albeit at a very low level, but increases in orders from our cable infrastructure customers here in the U.S. We are also starting to see slight growth and sequential growth in 10G- PON. The last item I'll highlight within Telecom is a segment we call metro long haul, which is generally these are links between Data Centers that are in different cities that use coherent modulation. These are generally very high data rates, 128 GB data rates. The customer base that's building these is sort of a different customer base than, let's say, the traditional Data Center customer base. We've started to see a ripple effect that the growing Data Center demand is now increasing the connectivity between Data Centers at higher rates. We are involved in some nice programs that are as high as 1.2T for coherent modules where we supply chips into those solutions. That business is doing well. We're actually continuing to build backlog to support our metro long haul business. We think that business will continue to grow over the next few quarters. That helps. Thank you. Maybe help me understand whether I think there is a similar dynamic in the Industrial part of your Industrial Defense. I think in your prepared remarks, you said that performance was unremarkable in those Industrial end markets. I suspect there is an over-inventory situation there as well, but I am not sure. Maybe you can clarify, please. Yes. I would say that we see that there are a few catalysts in the Industrial sector right now for growth. I would say end demand is weak. Perhaps there is an overhang of inventory issues, but we see more fundamentally a weak environment. Thank you. Our next question coming from the line of Quinn Bolton with Needham & Company. Your line is now open. Hey, guys. This is Neil Young on for Quinn Bolton. I know you touched on gross margin a little bit when discussing the Wolfspeed RF fab. I guess looking forward, what are your gross margin expectations throughout the rest of the year? If possible, could you walk us through the puts and takes? Thanks. Yeah, Neil, this is Jack Kober. As we've looked back over the past couple of quarters, we've been in the mid-57% gross margin range. Also looking forward to our guide that puts us roughly in a similar spot at 57.5% as the midpoint of the guide. As we get out longer term, I think we'll have to see how things play out from an overall mix perspective. We've continued to have some lower utilization of our Lowell fab, just where all of the costs are not being absorbed like they were a number of years ago. Some of that is driven by the low demand that Steve was just referencing with regard to the Industrial end markets that we service. As we go out longer term, we're going to have to see how it plays out. In terms of the guide that we have going out through Q3, still in that mid-57% range is where we see things. Okay. Great. Thanks. You did mention tariffs in your prepared remarks. I was wondering if you've seen any direct or indirect impact so far. If not, I guess looking forward, which areas of business by product line or end market do you think would be more exposed and which would be more insulated? Thank you. Thank you for the question. I would say that we've not seen any noticeable impact to date regarding customer behavior, whether pull-ins, push-outs, cancellations. We've seen none of that. I'll just remind everybody that over 95% of our business is direct with customers and in some cases with partners, reseller partners. We have good line of sight of major programs. We're selling non-commodity products that are generally sole source. We have a lot of stickiness with our business. I would say that we'll continue to monitor the situation. Of course, we have a complex manufacturing and assembly manufacturing footprint. I would say that this is something that the team is more than capable of managing. In terms of breaking out country of origin by product line, we're not going to do that due to competitive reasons and other reasons. The potential impact is always subject to change anyway. I would just reassure investors that our business is unique. It's in many ways very U.S.-centric. About half our business is here in the U.S., built and shipped into the U.S. The balance, the other sort of half of our business, I think we're going to be able to manage quite well. Thank you. Our next question coming from the line of Blayne Curtis with Jefferies. Your line is now open. Hey, guys. Good morning and great results. I actually wanted to go back to on the Data Center market. I thought you said mid-40s. Can I just clarify that? I'm assuming that's fiscal year. I just want to understand. I mean, I guess if you take it straight literally, that would be a down September. I think you said something about lumpiness. I thought when we saw you at OFC, it seemed like you had that transition to 800 Gb and it was coming in at plan. I just maybe you can just elaborate on what that messaging was. I think as we had this is Jack, Blayne. As we had talked about high level, if you look year-over-year, and that's fiscal year 2025 for us, we'd probably be in the mid-40s. I think we can support growth as we talked about going into the third quarter. Fourth quarter, as Steve had mentioned, is still to be determined. Still, the underlying demand is there to support growth even going into our fiscal fourth quarter. Gotcha. Thanks, Jack. Maybe another one for you. I just want to ask on OpEx. I think it increased $5 million or $6 million in March. I think the implied guide is probably something similar, maybe $4 million or $5 million. How do we think about OpEx for the year? Yeah. We've seen a step up here in the operating expenses, as I had described in my prepared remarks with some continued investments. We've been carefully managing our operating expenses over the past number of years. With that step up, we've made investments, obviously, in R&D type applications. There's also been other things as we're growing to that billion-dollar run rate that we hope to achieve in terms of investing in the business and things including IT infrastructure and IT security. There's other things that we're seeing. As we work our way through the remainder of the year and once we get beyond that Q3 time period, we would probably see a bit more of a leveling off of the operating expense increases from an absolute dollars increase standpoint going into Q4 and as we work our way through fiscal year 2026. Thank you. Our next question coming from the line of Srini Pajjuri with Raymond James. Your line is now open. Thank you. I just want to go back to the previous question on Data Center. The September commentary, I understand the visibility is not great in these businesses. At the same time, are you seeing any sort of inventory at your customers? Is that what is giving you pause? Because on one hand, I see that the market is moving to 1.6, and you also talked about the potential opportunity on the LPO, LRO side. I guess your commentary about September sounds a bit cautious. I am just trying to understand what is giving you that little bit of caution as we head into September. Yes. Thank you for the question. Just to be clear, we are not guiding for the fourth quarter. We go out one quarter at a time. We're certainly very confident in the numbers that we're forecasting for Q3. I just want to make that point. We would always be very, very cautious about commenting on more than one quarter out. You shouldn't read into that as negative news, let's say, or negative commentary or sentiment. It's just being cautious. Especially cautious in our most volatile market, as we talked about, which is the Data Center. In terms of the general trends, I would say that what we talked about on the last call is also playing out as we had expected, which is that we were seeing a major customer of ours ramp down multiple 800 Gb platforms. At the same time, we were ramping up other customers at 800 Gb. The timing and how those things come together has yet to play out. I would just highlight that. The second thing I would highlight just regarding 1.6T is there's really only one major company in the industry that is very focused on 1.6T. The rest of the industry is primarily focused on 800, 400, and even 100. When we peel apart our revenue and our numbers as we look forward, we see continued growth in even some of the lower data rates, including 100 Gb platforms. I just want to highlight that. The other thing I would highlight is we do not see an inventory issue in the Data Center segment. I would say it's the opposite. We are being expedited across multiple platforms, multiple data rates, multiple end customers. It is really the opposite. Customers, they want their products. They see demand. There is a lot of pressure on MACOM and our operations team to do more faster, which is a good problem to have. Hopefully that gives you comfort without guiding to Q4. Yeah. Thanks, Steve. That's very helpful. On the same topic, you kind of mentioned that the LPO, LRO standards have been ratified. Just want to hear your thoughts on what you're hearing from your customers in terms of what sort of interest there is in the market and what sort of applications are customers looking to implement these solutions in and in terms of speeds, are you seeing more interest in lower speed versus higher speed for these applications. Also, if you can talk about whether these applications are seeing interest from the so-called mega clusters or is it more for cloud workloads. I think that would be very helpful. Thank you. Yes. I would say a few things. What's interesting is, first of all, most of the folks that are interested are at 100 Gb per lane for 800 Gb solutions. That's number one. The second comment I would make is not all ISPs are interested right now in LPO. Some are very interested, and some are going to take a wait and see. We see the full spectrum. We have, as an example, ISPs that they care about reliability, and they don't care about power consumption or cost. Others, it's all about power, latency, and cost. They're willing to lean into new technologies like LPO. I think we're in this mode where people are very interested. They are looking at different use cases, and it's still very early. Okay? Ultimately, which ISPs are interested or not, I mean, that's proprietary information to MACOM. We're not going to discuss the engagements at that level. I can say that we see the continuum of interest. I would highlight that not all ISPs are interested today. I think over time that will change as the use cases and scale are proven out, and then the more risk-averse will perhaps adopt. In terms of the application, we see server to NIC, or I should say NIC to switch, and generally very short reach. That is the area that we will probably go into production first. Thank you. Our next question coming from the line of Peter Peng with JP Morgan. Your line is now open. Hey, thanks for taking my question. On the Data Center, you guys do have several new products coming, like your photodetectors, your CW lasers, and your ACC solutions. Maybe you can talk about how to think about the revenue ramp there and how material could it be in the second half of this year and more so in the next fiscal year. Sure. I mean, just to highlight that within our Data Center segment, we have multiple product lines, multiple functions, multiple form factors. To sort of call out two or three that may or may not be ramping sort of understates the breadth of the product line. I just want to highlight that. I did comment in the remarks that our 200 Gb photodetectors are ramping. Those are primarily for 800 Gb DR4 applications. I do not want to necessarily comment on the materiality of that. We also see opportunities and activity at 1.6T as well, just to be clear on the 200 Gb PD. I would say that the overall performance of our NPI metrics for our Data Center products is best in class. We have a very high success rate of designing products, getting them to market, and getting design wins that we had originally targeted. Our team does a very strong job with execution in this area. I'll highlight that today supporting our Data Center business. We actually have eight different design centers collaborating on different projects to support this business. A lot of moving parts, a lot of different end use cases. As I mentioned in my script, we're starting to take a very serious look at PCIE as the networks and the Data Centers begin to disaggregate memory and storage. That creates opportunities for high-speed connectivity. That would be another example of the SAM expanding where we are going to try to insert ourselves directly into those opportunities. Perfect. Thank you. Just on the gross margin, I think in aggregate, your Telecom and Industrial Defense are coming in a little better. I would think that would maybe help some of the utilization at your Lowell fab. Maybe just remind us what is running through your, what kind of products are running through your Lowell fab and maybe why even with the upside, it is more flattish gross margin. Sure. I think Jack touched on this a little bit that generally speaking, the utilization rates of our Lowell fab have not changed over the past couple of quarters. Most of the products within the Lowell fab are RF products. We have different categories. We have discrete diodes, and there's about half a dozen different product families within the diode product line. We also have MMICs that are GaAs or GaN running through the fab. Additionally, we are running indium phosphide lasers through the fab. It is a high-mix, medium-volume fab. I would say there generally is more exposure to Defense and Industrial-related markets with the Lowell fab. Not entirely, but I would say that's the most exposure. As we've been talking about over the past couple of quarters, our Industrial business is down. While our Defense business is growing quite strongly, it's coming from other areas of our technology portfolio. Thank you. Our next question coming from the line of Richard Shannon with Graig- Hallum Capital Group. The line is now open. Hi guys. Thanks for taking my question. Maybe I'll follow up in the I&D segment here. You're clearly suggesting Industrial soft, which is not necessarily surprising. It says the Defense part here is doing very well. I'd love to get a sense of if there's any large programs that are driving this very strong growth we're seeing in this quarter. Does that convey over to following quarters here? Would it seem to suggest that the I&D segment kind of takes growth leadership for MACOM as we get into fiscal 2026? Thank you for the question, Richard. Our core area in Defense is centered around radar systems. Second to that would be EW and communication systems. When we look at these platforms, we envision not just selling RF content, but also optical content and subsystem content. You have a wide range of solutions and platforms that we're selling to these large programs. There is absolutely a refresh going on with radar systems across multiple platforms to address drone-related threats. We are involved on both sides of that equation. We're involved on the next-generation drones that have more sophisticated sensors, as well as technologies that want to knock the drone out of the sky. We would be looking at ways to support both of those applications. As we look at our business and our strategy, our strategy is to bring more technologies to bear on this market. We've talked over the last couple of years about MACOM pivoting a lot of its analog mixed signal and optical technologies into the Defense market. That strategy has been playing out and proven to be very successful. In terms of our 2026 and the potential growth there, I think it's too early to say. Other than I'd just highlight that our team has never been busier in terms of the amount of opportunities. When we acquired Wolfspeed's portfolio, it was a major booster shot of high-power technology to MACOM. We are taking full advantage of that in the market. We believe we are gaining market share in large radar systems, not only ground-based, but shipborne and airborne. Very helpful details, Steve. Thanks for that. My second question is in Data Center. Really kind of looking at the newer products and how do we think of this over the next one to two years. Obviously, you just started selling the PDs here at 200 Gb. Talked about CW lasers and LPO. How do we think about kind of the timing, I guess, more so on the CW lasers and LPO? If you look, say, one to two years out, which one of these newer areas within this bucket do you think can have the most impact? Yeah. I think that's a tricky question because I would say our batting average on calling the future is not so good. We have had examples in the past where we thought one product line would have a breakout year, and it turns out it was another one. I would say that we would rather talk about the successes of these new product lines retrospectively. We are talking about the PD because we have big orders, and we are ramping production. As the other product lines come on, we will certainly do the same there. With that said, I would just highlight we are very interested in taking a position in the market on CW lasers. We have a unique technology with our edge-faceted technology. We believe that the market demand for CW lasers is increasing. We still have a lot of work to do. I think that the market wants a 75 mW or 100 mW part. We are working to make sure that we can field a very competitive part. Still a lot of work to do there. If we have success on lasers, it could be a meaningful number. We do not want to count our chickens before they hatch. Thank you. I am showing no further questions in the queue at this time. I will now turn the call back over to Mr. Steve Daley for any closing remarks. Thank you. In closing, I would like to acknowledge and thank all of our employees for their continued dedication. Have a nice day. This concludes today's conference call. Thank you for your participation. You may now disconnect.