Ladies and gentlemen, thank you for standing by. Welcome to the Silicom First Quarter 2025 Results Conference Ladies and gentlemen, thank you for standing by. Welcome to the Silicom First Quarter 2025 Results Conference Call. All participants are present in listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session. As a reminder, this conference is being recorded. You should have all received by now the company's press release. If you have not received it, please contact Silicom's Investor Relations team at EK Global Investor Relations at 1-212-378-8040 or view it in the news section of the company's website, www.silicom-usa.com. I would now like to hand over the call to Mr. Kenny Green of EK Global Investor Relations. Mr. Green, would you like to begin, please? Thank you, Operator. I would like to welcome all of you to Silicom's Quarterly Results Conference Call. Before we start, I would like to draw your attention to the following Safe Harbor Statement. This conference call contains forward-looking statements. Such statements may include, but are not limited to, anticipated future financial and operating results and Silicom's outlook and prospects. Those statements are based on management's current beliefs, expectations, and assumptions, which may be affected by subsequent business, political, environmental, regulatory, economic, and other factors and conditions, and are subject to known and unknown risks and uncertainties and factors, many of which are outside of Silicom's control, which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements. These include, but are not limited to, Silicom's increasing dependence for substantial revenue growth on a limited number of customers, the speed and extent to which Silicom solutions are adopted by the relevant markets, difficulties in the commercialization and marketing of Silicom's products and services, maintaining and protecting brand recognition, protection of intellectual property competition, disruptions to manufacturing and sales and marketing, development and customer support activities, the impact of war in Israel and in Ukraine, rising inflation, changing interest rates, volatile exchange rates, tariffs, as well as any continuing or new effects resulting from the COVID-19 pandemic and global economic uncertainty, which may impact customer demand through customers exercising greater caution and selectivity with their short-term IT investment plans. The factors noted are not exhaustive. Further information about the company's business, including information about factors that can materially affect Silicom's results of operations and financial conditions, are discussed in Silicom's annual report on Form 20F and other documents filed by the company, and that may be subsequently filed by the company from time to time with the U.S. Securities and Exchange Commission. Therefore, there can be no assurance that actual future results will not differ significantly from anticipated results. Consequently, investors are reminded not to rely on these forward-looking statements. Silicom does not undertake to update any forward-looking statement as a result of new information or future events or developments except as may be required by law. In addition, following the company's disclosure of certain non-GAAP financial measures, in today's earnings release, such non-GAAP financial measures will be discussed during this call. Such non-GAAP measures are used by management to make strategic decisions, forecast future results, and evaluate the company's current performance. Management believes that the presentation of these non-GAAP financial measures is useful to investors' understanding and assessment of the company's ongoing operations and prospects for the future. Unless otherwise stated, it should be assumed that the financials discussed in this conference call will be on a non-GAAP basis. Non-GAAP financial measures disclosed by management are provided as additional information to investors to provide them with an alternative method for assessing the company's financial condition and operating results. These measures are not in accordance with or a substitute for GAAP. A full reconciliation of non-GAAP to financial GAAP measures is included in today's earnings release, which you can find on Silicom's website. With us on the line today, we have Mr. Liron Eizenman, President and CEO, and Mr. Eran Gilad, CFO. Liron will begin with an overview of the results, followed by Eran, who will provide the analysis of the financials. We will then turn the call over to the question and answer session. With that, I would now like to hand the call over to Liron. Liron, please go ahead. Thank you, Kenny. I would like to welcome everyone to our conference call to discuss the results of the first quarter of 2025. We are pleased with our start to 2025, which reflects solid execution and progress in line with our strategic plan aimed at bringing renewed revenue growth, profitability, and ultimately increased shareholder value. In addition, we saw significant design win momentum and made strong progress growing our mid and long-term pipeline. The quarter demonstrates that we are advancing and achieving meaningful milestones with various customers and projects, and all this makes us more optimistic that we will drive an acceleration in revenue growth in 2026 and beyond. In terms of the financial results, we delivered revenues of $14.4 million, which were in line with our targets and delivered gross margin and operating expenses in line with our strategic plans. Our balance sheet has therefore continued to remain very strong. Our working capital and marketable securities amounted to $119 million, including $77 million in cash deposits and highly rated bonds with no debt. All this represents about $21 per share. This ensures we can maintain adequate investment in our business and its growth engines, even in this very volatile market, without compromise. From a strategic perspective, I'm very happy to report that we are on track with our plan to return to solid double-digit growth rates, materializing gradually from 2026. To remind you, the long-term financial goals of our strategic plan are to deliver an EPS above $3 based on revenues between $150 and $160 million. The most tangible indicator of our progress is the impressive number of design wins told during the quarter and the breadth and depth of our design win opportunity funnel. Our renewed focus on our core product lines, coupled with the deep relationships with our customers and potential new customers, has created a solid pipeline enabling our future growth potential. So far in 2025, we have already seen success in converting this pipeline to design wins, the main indication for the progress of our strategic plan. We expect to continue to convert this pipeline to further design wins throughout 2025. In our previous call, we discussed our target of achieving between seven and nine new design wins in 2025, and we are well on track. Since the beginning of the year, we have been awarded three important new wins, two with cybersecurity leaders and one with the Global Network Test Equipment Company, which together encompasses our full product range, from Smart NICs and FPGA-based products to our advanced Edge systems. All three are repeat customers of ours that already rely on Silicom products to give their system performance edge, and all three have decided to expand their business with us as they embark on a new project. I want to highlight those recent design wins in more detail. Number one, a U.S.-based global provider of advanced network testing equipment solutions selected our 100-Gigabit Network Interface Cards for the next-generation platform. This customer placed an initial purchase order to cover its new product introduction needs, and we expect mass deployment to begin in early 2026. Once the product ramps up, we expect the total business with this customer to be $2.5 million per year. We are very proud that this global giant turned to us for a performance edge, and it speaks volumes about the innovation at the heart of our high-performance needs and our reliability as a design partner. Customers such as this represent the backbone of our business, with the potential to secure new design wins with a shorter sales cycle process, contributing to a growing base of revenues. Number two, we also won a design win with a U.S.-based cybersecurity leader, choosing our latest Altera-based 400-gig FPGA Smart Card for its new network monitoring offering. The customer placed an initial order with us, and at full ramp-up, we expect revenues will reach $3 million per year. This design win represents the successful conclusion of many months of collaborative effort with the customer. As a full-service supplier, we work closely with the customer to meet the feature set and performance requirements to deliver them as a complete solution, fully integrated and tested within a server. This demonstrates the added value of Silicom's engineering talent, whom customers often view as an extension of their own R&D team. This win demonstrates the importance of the full package that we offer, a uniquely broad product line based on advanced technology, hands-on collaboration with the customer, and a rapid development and delivery capability. Number three, a major US cybersecurity customer of ours awarded us a design win for a customized version of a wireless connectivity-enabled Silicom Edge system, incorporating a Silicom network interface card for the next generation of one of its leading product lines. Our ability to carry out the required customization quickly and to provide both the edge system and the network interface card that are incorporated within the system, together with our deep wireless know-how, were key factors in securing the win. We expect demand to continue to build for our edge systems, smart network interface cards, and innovative products that integrate it too, becoming a key driver of our future growth. Initial orders have been received, and we expect to start ramp-up during the second half of 2025, with revenues of $2 million per year at the full run rate. This win expands the relationship that Silicom has been building with the client for several years, ramping up the range of products sold from network interface cards to complex edge systems. Those types of wins are now our focus, building steady, long-term, and trusting relationships that give rise to multiple deals, leveraging a reliable, diversified revenue stream from an expanding base over the long term. The relationships are based on deep trust built over a long period of time and show slow but solid growth, supporting the success of our strategic plan. The power of each design win is not only to generate its own stream of recurring revenues, but also to open the door to multiple additional opportunities. This combination, along with the growing number of potential new customers who are currently evaluating and testing our products, underlines our confidence in achieving our target for seven to nine design wins during 2025. While our recent design wins will have a minor positive impact on our financial results in 2025, we believe those and others that we expect to sign in the coming months will form the foundation for a significant growth in 2026. I note that if the opportunities in the pipeline ramp faster than expected, we could achieve the goals of our strategic plan significantly sooner than currently projected. Our pipeline of opportunities at the input of our design win funnel is very broad across all our products, including Edge systems, Smart NICs, and FPGAs, and includes both new and existing customers. This pipeline includes leading names in the cybersecurity, service provider, and networking industries, highlighting the strength and appeal of our technology offering. We believe that during the coming years, we will see more and more opportunities turn into design wins, and we are constantly adding further opportunities at the entry point of the funnel. This is the main engine behind our strategy for growth. I want to highlight our new investor presentation available on our website, which includes examples of many opportunities in our pipeline. It also shows examples of the opportunities that made it through the funnel and became design wins, driving revenue growth. We are seeing the positive impact of our strategic plan, expanding the pool of future opportunities with small to medium design wins, as well as potential deals in the range of double-digit millions of dollars in annualized revenue. Considering the impressive pipeline and by executing all aspects of the strategy, we continue to believe that we will achieve the main goal of our strategy to create significant value for our shareholders with EPS of about $3 based on revenues in the range of $150-$160 million over the long term. A fast ramp-up of a few of the potential deals we have in the pipeline may help us to achieve this goal much faster than currently indicated in our strategic plan, and we are fully focused on making this happen. Looking ahead, in terms of guidance, we continue to project low single-digit growth for 2025, with double-digit growth expected for 2026. For the second quarter, we expect between $14.5 million and $15.5 million in revenue. In summary, we are pleased with our progress. We are very optimistic about our ability to continue to execute on our growth plan and fully focus on meeting our goal of creating value for our customers and for our shareholders. We are advancing towards our mid and long-term goals with a robust pipeline that positions us well for double-digit growth from 2026 onward. As I've mentioned, we aim to achieve seven to nine design wins in 2025, of which three have already won, which demonstrates we are well on track. Looking further ahead, our focus remains on delivering long-term shareholder value, targeting an EPS above $3 on annual revenues of $150-$160 million. As I said, a faster ramp-up of a few of the potential deals we have within the pipeline may help us to achieve this goal faster. We have a solid design win roster full of tier-one customers, coupled with a superb product and a robust pipeline of opportunities. We have a strong financial foundation with a solid balance sheet. With a very dedicated and loyal team possessing decades of experience in the hardware business, we are optimistic about our ability to execute our strategic plan and meet our goals. We look forward to reporting on our progress as we continue executing on our growth strategy. With that, I will now hand over the call to Eran for a detailed review of the quarter results. Eran, please go ahead. Thank you, Liron, and good day to everyone. Revenues for the first quarter of 2025 were $14.4 million, similar to the $14.4 million reported in the first quarter of last year. The geographical revenue breakdown over the last 12 months was as follows: North America 78%, Europe and Israel 14%, Far East and rest of the world 8%. During the last 12 months, our two 10% plus customers together accounted for about 24% of our revenues. I will be presenting the rest of the financial results on a non-GAAP basis, which excludes the non-cash compensation expenses in respect of options and RSUs granted to directors, officers, and employees, taxes on amortization of acquired intangible assets, as well as lease liabilities, financial income. For the full reconciliation from GAAP to non-GAAP numbers, please refer to the press release we issued earlier today. Gross profit for the first quarter of 2025 was $4.4 million, representing a gross margin of 30.3% compared to a gross profit of $4.1 million or gross margin of 28.5% in the first quarter of 2024. As discussed previously, our short to mid-term expected gross margin range is between 27%-32%, and as our revenues grow from current levels over the longer term, it is expected to increase towards the upper end. Operating expenses in the first quarter of 2025 were $6.7 million compared with $6.8 million reported in the first quarter of 2024. Operating loss for the first quarter of 2025 was $2.4 million compared to an operating loss of $2.7 million as reported in the first quarter of 2024. Net loss for the quarter was $2.1 million compared to a net loss of $2.4 million in the first quarter of 2024. Loss per share in the quarter was $0.37. This is compared with loss per share of $0.38 as reported in the first quarter of last year. Now, turning to the balance sheet, as of March 31, 2025, our working capital and marketable securities amounted to $119 million, including $40 million in high-quality inventory, accounts receivable, net of accounts payable of $3 million, and $77 million in cash, cash equivalents, and highly rated marketable securities with no debt. That ends my summary. I would like to hand back over to the operator for questions and answers session. Operator. Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. If you have a question, please press star one. If you wish to cancel your request, please press star two. If you're using speaker equipment, kindly lift the handset before pressing the numbers. Your questions will be polled in the order they are received. Please stand by while we poll for your questions. The first question is from Ryan Koontz of Needham & Company. Please go ahead. Thank you for the question. Great to hear about the progress with your new design wins there. Are there particular milestones you're tracking for those design wins after you've had these initial orders and contracts with these customers that you can maybe—I am not looking for specifics, but just at a high level, what sort of milestones you're tracking and how you feel about the progress of those wins as we look forward over the next few quarters? Thank you. Every design win is a little bit different, but in general, once we get the win, there's the first stage where we probably need to do some customizations for the customer, maybe some development. That's obviously one milestone we need to keep track of. It's our internal process of the development and customization, make sure with the customer everything is clear on the specs and what they're supposed to get and when. Once we are ready, we're shipping samples or shipping first shipment to the customer. We want to see they're happy. We want to see we get their green light for mass production. That's another very important milestone. The third one is when we start mass production, start shipping them the products, we work very closely with them to see that they're happy with that, that they're selling it to their customers, their customers are happy. That's, I would say, the third main milestone. Every project is a little bit different. That's great. Thank you for that. It sounds like one of your design wins is with an Altera design. Are you seeing an increased mix or requirement from customers to roll out FPGA-based NIC cards or interfaces? We see quite a lot of demand in every one of our, let's say, main product lines. FPGA is definitely one of them. Altera is definitely a key partner for us for our FPGA business. We see a lot of interest in that market. The proof for that is that we actually saw a design win as we published earlier this year. We also announced just recently, actually last week, a cooperation we're doing with an IP partner of ours called Identicom. We announced a strategic partnership with them that allows us now to bring together a product that is very critical for the cybersecurity and other network vendors' equipment to protect their equipment and solutions, not only for today, but for post-quantum encryption that will become very, very important soon. This is something that we're both investing in and also seeing a lot of traction in. Great. Maybe one more if I could. What are your thoughts around tariffs and how that gets implemented? Is that something you expect your customers to pay or will you have to pay that and maybe have to add a line item around tariffs? What's your thinking around the tariff situation? I know it's fluid right now, but any kind of baseline would be helpful. Yeah. As you said, it's very fluid. That's number one. At least at the moment, Silicom, we do not see an immediate impact. Our products at the moment are exempt because of their classification. They're exempt from any tariff right now. We definitely monitor that very closely and stay very alert to see how that pans out eventually. We're looking at different models and what would make sense if we would make a change, what kind of change. I think it's very fluid, as you said. Right now, since our products are exempt, we don't see any immediate demand. We just keep in touch with our customer, hear their thoughts, and just keep tracking whatever comes out. We'll make sure that we can react if we need to react when something comes out. Gotcha. That's great. That's all we've got. Thank you. The next question is from Christopher Wormsen of DNB. Please go ahead. Yeah. Thanks for my question. Yeah. Just having a look at some of the design wins you have in your pipeline with the data infrastructure, storage networking kind of thing, $10 million per year. Sorry. Just trying to understand what kind of applications you are seeing here more specifically driving this kind of step change in your growth in the next years compared to historical levels. I mean, I think I would also refer you to our investor presentation to look at the pipeline a little bit. We try to give the pipeline over three main product lines. That is over our Smart NICs, over our FPGA products, and over our Edge systems. We see quite a lot of demand in all of them. We see in cybersecurity, definitely, that is one area that really requires us to put out new products out there. Higher speeds in networking are needed. More acceleration and offloading from the main CPU is needed as encryption, decryption, and compression, decompression is becoming more challenging as the main CPUs need to do more and more. We see also with our Edge systems more and more as we also provide higher-end solutions into the market. We're able to support our customers not only with lower-end systems but also with our higher-end systems. We've seen a few examples of those design wins in the last year. I think overall, we see a lot of demand for networking. There's a lot of networking needs out there. As we work very closely with customers, they really trust us both on the R&D level and later on on the mass production level. We are the right partner for them, and they keep bringing to us more and more business. Just an example for that is the last three design wins we announced are from existing customers, basically trusting us with more and more projects. Those customers have a lot of hardware projects. A lot of our pipeline is also from existing customers, not only new customers. The next question is from Donald McKiernan of Landolt Securities. Please go ahead. Thank you. Did you already give an update on your share buyback program and what occurred during the quarter? We moved forward during the first quarter. We purchased a few dozen thousand of buyback shares. That's the update. Just like 36,000 shares is all you bought back? Can you repeat your question? Yeah. How many shares did you buy in the quarter and at what average price? First of all, I would say that during the last five quarters, I mean, starting 2024, we purchased over 700,000 shares. The portion in quarter one was a little bit less than 100,000 shares. Okay. Why wouldn't you buy more? Or the market conditions just didn't allow you? Can you explain? This is a result of the activity in the market in each day. When the volume is not so high, it means that the portion that we are able to purchase is limited. Right. How much do you have left in your current, in terms of dollars, your current share buyback program? I would say that during the last year, we purchased over $8 million. What is left? $7 million left? Can you repeat? Yeah. How much is left in the? How much is left? About $8 million. Okay. Thank you. My next question, last question. A year and a half ago, when revenues declined, some of your major customers were still working off excess inventory on some of your larger opportunities. Has that passed? Are they going to start reordering their larger quantities, or are those opportunities gone away? I'm sorry. Couldn't hear the first part of the question. Can you repeat? Yeah. I believe about a year and a half ago, you had some large opportunities. In In closed design wins, and those customers had built up excess inventory during COVID, and they were working off those inventories on large deployments, and they were going to then come back and reorder products, as I recall from you, once they worked off their internal inventories. I mean, we did mention there's excess inventories to some of our customers, and we do see some relief in that. We said we will continue to see that in 2025. We see some relief. Some customers are coming and buying back again some things they didn't buy for a while. I wouldn't say this problem completely went away. Partially, it went away. We think it will continue throughout 2025, and we'll see some ramp-up coming back. Each project is different, and each situation is different. I don't know to say that all of them will come back. It really depends on the situation. We don't know exactly how it will come back because technology moves on, situations within certain companies change along the way. We hope that many of them will come back and will buy more. We keep in touch with them, but it really changes from case to case. We know for sure—this is something we said back then—that we know for sure that we do not know exactly who will come back, and we know that maybe some of them will not. That is, again, something we're tracking very closely. There's good and bad here. Some did, some did not. Some we're still keeping track, and hopefully, their business will pick up. I hope that answers your question. Yeah. Thank you. And good luck. Thank you. Thank you. If there are any additional questions, please press star one. If you wish to cancel your request, please press star two. Please stand by while we poll for more questions. There are no further questions at this time. Before I ask Mr. Eizenman to go ahead with his closing statement, I would like to remind participants that a replay of this call will be available by tomorrow on Silicom's website, www.silicom-usa.com. Mr. Eizenman, would you like to make your concluding statement? Thank you, Operator. Thank you, everybody, for joining the call and for your interest in Silicom. We look forward to hosting you on our next call in three months. Good day. Thank you. This concludes Silicom's first quarter 2025 results conference call. Thank you for your participation. You may go ahead and disconnect.