Good day, and thank you for standing by. Welcome to Semtech Corporation's fourth quarter and fiscal year 2025 earnings conference call. At this time, all participants are in a listen-only mode. After management remarks, there will be a question-and-answer session. Please be advised that today's conference call is being recorded. I would now like to hand the conference over to Mark Lin, Executive Vice President and Chief Financial Officer. Please go ahead. Thank you, Operator. Good day, everyone, and welcome. I'm pleased to be joined today by Hong Hou, President and Chief Executive Officer. Today, after market close, we will release our unaudited results for the fourth quarter and fiscal year 2025, which are posted along with an earnings call presentation to our investor website at investors.semtech.com. Today's call will include various remarks about future expectations, plans, and prospects, which comprise forward-looking statements. Plea se refer to today's press release and see slide two of the earnings presentation, as well as the risk factor section of our most recent annual report on Form 10-K for a number of risk factors that could cause our actual results and events to differ materially from those anticipated or projected on this call. You should consider these risk factors in conjunction with our forward-looking statements. Unless otherwise noted, all income statement-related financial measures will be non-GAAP other than net sales. Please refer to today's press release and see slide three of the earnings presentation for important information regarding notes on our non-GAAP financial presentation. The press release and earnings presentation will also include reconciliations of our GAAP and non-GAAP financial measures. With that, I will turn the call over to Hong. Thank you, Mark. Good afternoon, everyone. Fiscal year 2025 represented a year of a positive inflection on many fronts. For each quarter, we reported sequential growth in net sales, gross margin, operating margin, and earnings per share. Our signal integrity and analog mixed signal and wireless segments demonstrated strong sequential growth in each quarter of FY25, and our IoT systems and connectivity segment inflected to sequential growth in the second quarter of FY25. Aligning to one of our near-term priorities of driving margin expansions through disciplined investment, innovation, and efficiency on a year-over-year basis, FY25 adjusted gross margin improved 200 basis points, adjusted operating margin improved 570 basis points, adjusted EBITDA margin improved 610 basis points, and adjusted diluted earnings per share increased 529%. During FY25, we uncovered and aggressively pursued many opportunities through close customer engagement. We were able to prudently shift investments to R&D programs that were better aligned to major market opportunities and accelerated product development supporting these opportunities. We also executed on our near-term priority of balance sheet improvement, substantially reducing our leverage and cash interest burden. This, in turn, allowed us to increase focus on operational improvements and strategic direction. We continue to prioritize divestitures of non-core assets, and we believe the reduction in total leverage during FY2025 and stronger business fundamentals better positions Semtech in our ongoing portfolio optimization process. We remain focused on elevating our winning culture, and I'm pleased with the marked improvement in our employee engagement metrics. In the new fiscal year, we're intentionally focusing on three core priorities to position Semtech for future success. First, portfolio optimization and simplification. Driving to completion the initiatives we started and focus on our core competencies. Second, strategic investment in R&D. Accelerating innovation to support broader customer programs and driving sustainable long-term growth while maintaining financial discipline. Third, driving margin expansion. Enhancing profitability through portfolio optimization, leveraging AI for efficiency and productivity, and maximizing operational leverage on higher revenue. With the strong progress we made in FY25, we aim to deliver even greater value to our shareholders in FY26. Moving to our end markets. For Q4, infrastructure net sales were $69.1 million, up 5% sequentially and up 75% year-over-year. Net sales for data center were a record $50 million, up 16% sequentially and up 183% year-over-year. I am pleased with the growth across our data center portfolio. Regarding CopperEdge use in active copper cables, we are disappointed that the expected volume ramp will not materialize for FY26 due to rack architecture changes as we previously announced. We now expect CopperEdge demand at our on-call customers to be lower than our prior expectations for three to four quarters, based on our estimate of the new server rack deployment timelines. We continue to believe CopperEdge deployment will encompass broader applications, including our ICs embedded in board designs and our ICs embedded in connectors, in addition to our initial deployment in a cable application. CopperEdge at 1.6T aggregated bandwidth was introduced about a year ago, and we believe Semtech's advancements in low-power, low-latency solutions will be a significant differentiator in the ecosystem. We remain engaged with over 20 potential customers, including hyperscalers, switchmakers, and cable suppliers for a number of use cases, and expect this engagement to result in revenues from multiple customers and multiple applications by the latter part of FY2026. Lastly, based on continued collaboration with our anchor customer, we expect our CopperEdge portfolio to be included in their future-generation rack designs. For our FiberEdge portfolio, net sales were at a record level, supporting 400G and 800G retimed optics across a broad market of module manufacturers and cloud service providers. For linear pluggable optics, or LPO, and linear receive optics, or LRO, we remain confident in adoption starting in the latter part of fiscal year 2026. Test and qualification are progressing as expected at several module manufacturers for both 800G and 1.6T applications. I look forward to the upcoming Optical Fiber Communications Conference, or OFC, to be held in San Francisco the first week of April. Semtech and our technology partners will have multiple product demos showcasing our TIA and our laser driver components in numerous LPO and LRO modules. In addition, we are scheduled to show our 400 gig per channel test chips to support 3.2T aggregated bandwidth transceivers. I also look forward to participating in the CEO panel during the Optica Executive Forum at OFC. Moving to our high-end consumer end market. Net sales for Q4 were $35.4 million, up 10% year-over-year, and for FY2025, net sales were $147 million, up 17% year-over-year. In our high-end consumer TVS, our Transcend Welded Separation product line, net sales for Q4 were $24.1 million, up 16% year-over-year and down 15% sequentially, reflective of typical seasonality. FY2025 net sales were $103.3 million, up 33% year-over-year, reflective of steady contributions from DesignWinds and market share expansion over the last year at the world's largest consumer electronics company and at other key North American and Korean companies. We believe our customers' increasing technical requirements move the market toward our differentiated products. USB Type-C high-power charging is a particular example of the need to increase protection capabilities while maintaining signal integrity of USB Type-C high-speed data traces. Our class-leading PerSe or person sensing product continues to perform well in the market, with a leading position in smartphones to address specific absorption rate or SAR standards, with draft regulations introducing increasingly stringent requirements. PerSe continues to gain market share as customers expand the use of Semtech's ICs to achieve superior compliance to SAR standards without compromising device performance. PerSe in smart glasses is another key application where our technology allows for hyper-responsive gesture control capabilities, critical to accurate control for call and message, content capture, and media settings. A key customer characterized smart glasses as a potential next-generation compute platform and an AI form factor, and we believe Semtech is well-positioned to support this customer on current and future designs. Moving to our industrial end market. For Q4, industrial net sales were $146.6 million, up 12% sequentially and up 21% year-over-year. Within the industrial end market, LoRa-enabled solutions recorded Q4 net sales of $37.1 million, up 28% sequentially and up 205% year-over-year. Smart meters are just one of the applications well-suited for LoRa, and we are pleased with the incremental smart meter wins in France, Germany, the U.K., and China. For water and gas meters, we believe LoRa's sensitivity, which permits robust collection of readings through physical barriers, and the ability to extend battery life over multiple years are key differentiators over competing protocols. Our LoRa Gen 2 and Gen 3 products have been well-received and are the predominant LoRa volume. They offer smaller device footprints combined with improved radio performance and easier integration, allowing ecosystem partners to reduce time to market. For example, LoRa Gen 3 includes capabilities to integrate LoRaWAN inside the modem, which reduces LoRa-specific design expertise required to integrate LoRa into a device. Semtech also released the first Gen 4 chip in the LoRaPlus family early this week. LoRaPlus is a single-chip solution that addresses use cases requiring a robust long-distance link combined with multiple protocol capabilities, including Amazon Sidewalk, YSUN FSK, and Z-Wave. The LoRaPlus transceiver also supports terrestrial and satcom networks, and its increased data rates support audio streaming and image transfer. Our IoT systems hardware business recorded Q4 net sales of $69 million, up 19% sequentially, coupled with another quarter of a sequential increase in bookings. Our IoT systems business pipeline benefited from the inclusion of a significant China-based market participant on the Section 1260H list in January 2025, and we expect pipeline to convert to bookings throughout the year. During the same month, a Europe-based participant announced it was exiting the cellular IoT market, providing another potential tailwind to the business. In Q4, we are pleased to have achieved a 5G REDCap certification, a significant milestone in collaboration with AT&T and Qualcomm. This is AT&T's first 5G REDCap certification, and we believe this positions us to make sustainable, scalable, and cost-effective solutions attainable for many industries. IoT connected services net sales were overall stable for this largely recurring revenue business. We are pleased that Air Vantage Smart Sensing has been recognized with the M2M Innovation of the Year Award by IoT Breakthrough. Air Vantage Smart Sensing offers a turnkey LoRaWAN sensor network solution with a global cellular backhaul, allowing our customers to efficiently manage the design and configuration of a secure and scalable sensor network. In summary, I'm very pleased with Semtech's execution and performance across our businesses, and thank our employees for embracing our Semtech Rising initiative, which incorporates elements like transparent and frequent communications on our vision and priorities to drive alignment and leadership and employee development, all of which are aimed at bringing out the best from our employees. I now turn the call back to Mark for additional details on our financial results and our outlook for the first quarter of FY2026. Thank you, Hong. For Q4, we recorded net sales of $251 million, up 6% sequentially. Net sales trends by end market, reportable segment, and geographic region are included on slide 16 of the earnings presentation. Adjusted gross margin was 53.2%, up 80 basis points sequentially and up 430 basis points year-over-year. Adjusted net operating expenses were $83.7 million within our guidance range, with a sequential increase in research and development for what we believe to be prudent investments to accelerate realization of market opportunities. Adjusted operating income was $49.8 million, resulting in an adjusted operating margin of 19.9%, up 160 basis points sequentially and up 1,070 basis points year-over-year. Adjusted EBITDA was $57.8 million, and adjusted EBITDA margin was 23%, up 140 basis points sequentially and up 1,050 basis points year-over-year. Adjusted gross margin, adjusted operating margin, and adjusted EBITDA margin all sequentially improved in each quarter of FY2025, representing sustained growth. Adjusted net interest expense was $11.2 million, reflective of approximately two months of savings from a debt paydown. We recorded adjusted diluted earnings per share of $0.40, up from $0.26 in Q3 and up from a loss of $0.06 from Q4 of last year. Operating and free cash flow for Q4 were $33.5 million and $30.9 million, respectively. We ended Q4 with a cash and cash equivalents balance of $151.7 million, which included principal payments of $10 million on our credit facility that were incremental to payments from the equity offering. At the end of FY2025, net debt was $411 million, a reduction of $868 million, or 68% from the $1.3 billion as of the end of FY2024. I believe we executed well to our previously stated capital allocation priority of reducing leverage. To summarize benefits Semtech has and expects to realize from debt reduction, first, debt paydown enables Semtech to focus investment on our core business growth engines. Second, the reduction in debt from the equity offering will provide annual cash savings of approximately $40 million based on interest rates at the close of the offering, which resulted in accretion on an on-GAAP basis. T hird, we believe meaningful debt reduction demonstrates a strong commitment to our customers, suppliers, and partners to improve financial solidity and return focus to operational and strategic priorities, which we expect will lead to increased collaboration and market share gain. Now, turning to our first quarter outlook, we currently expect net sales of $250 million, plus or minus $5 million, up 21% year-over-year at the midpoint. We expect net sales from the infrastructure end market to increase sequentially, with data center applications leading the growth. This outlook incorporates the effect from CopperEdge related to previously discussed rack architecture changes. We expect net sales from the high-end consumer end market to be up slightly, reflective of a seasonally stronger first quarter. We expect the industrial end market to be down, reflective of seasonality in our IoT portfolio. Based on expected product mix and net sales levels, adjusted gross margin is expected to be 53%, plus or minus 50 basis points. Adjusted net operating expenses are expected to be $87 million, plus or minus $1 million, resulting in an adjusted operating margin at the midpoint of 18.2%, a 600 basis point improvement year-over-year. Adjusted EBITDA is expected to be $53.3 million, plus or minus $3 million, resulting in an adjusted EBITDA margin at the midpoint of 21.3%, which will equate to a year-over-year increase of 520 basis points. We expect adjusted net interest expense to be $6.3 million, reflective of leverage-based pricing on our credit facility that reduces our term loan interest rate by 200 basis points. We expect a normalized income tax rate of 15%, consistent with our FY2025 rate. These amounts are expected to result in adjusted diluted earnings per share of $0.37, plus or minus $0.03, based on a weighted average share count of 90.1 million shares. With that, I now would like to turn the call back over to the operator for Q&A. Thank you. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press Star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press Star 2 if you would like to remove your question from the queue. We ask that analysts limit themselves to one question and a follow-up so that others may have an opportunity to ask questions. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the Star keys. One moment, please, while we pull for questions. Our first question comes from Harsh Kumar with Piper Sandler. Please proceed with your question. Yeah, Hong and Mark, you guys have done a great job on the balance sheet, but you actually said something on the CopperEdge portfolio that caught my attention given the controversy around it. Hong, I was hoping that you could expand on your comment around what you're seeing in boards and connectors. Also, you mentioned your sort of lead customer is looking at components of these products and this technology for future generation. Maybe also explain on that. Sorry for the multi-part question, you said you expect to be down or lower for a couple of quarters. I think you said three or four, but then you expect a pickup. Maybe talk about all this and why you expect a pickup and what content are you seeing in these places, particularly with your large customer. Thank you, Harsh, and for the questions. First of all, just on CopperEdge, in Q3, we reported our revenue is a high single-digit million dollars, and we guided in Q4 to be marginable incremental increase. We just did that. As we announced previously in fiscal year 2026, the revenue for CopperEdge is going to be below $50 million. As we reported on the data center revenue on this Q4, the $50 million, CopperEdge portfolio added into a very broad data center portfolio is a nice addition. In the future, we do not intend to break out a CopperEdge contribution to the total revenue of the data center portfolio. As for the engagement, as I reported, we have been engaging with over 20 customers. This is a nascent business. It's a new product. It's generating a lot of interest. It was only released about a year ago, but it will take some time for customers to design them in different form factors. The revenues to date have been primarily generated from the applications in the active copper cables. We have many use cases for different applications by different customers designing our CopperEdge product onto the board or in the connectors. We do see that a different pace of the adoption and the qualification and testing status, but we are very confident that before the end of this year, we'll have revenue generated from more than our anchor customer in a board and a connector applications. As for the anchor customer, and we have been engaging with them very tightly in the immediate next generation after the current one. We don't have content to interconnect racks because it's a single rack solution. Going forward, we understand that our product is in their design in the form of either on the board or in a cable form. As for this air pocket of three, four quarters, I mean the most specifically for that one customer, one application. The other applications and revenue could come sooner than that. Understood. Hong, sorry for the long-winded question, but thank you. Very, very helpful. I just wanted to ask on your core business. You've been growing when every other analog company has been down because primarily you entered the correction earlier. You started correcting earlier. Do you feel like you have good visibility on being able to call for, call it sequential growth from here on? Are you at a point where maybe just like your industrial business, you're starting to see where you've normalized and your normal seasonality comes into play? Are we still looking at growth from here? Yeah, that's a good question, Harsh. Certainly, we have been over-indexed, I would say, on the attention on ACC or CopperEdge and the data center growth. We do indeed, for Semtech, have a broader portfolio. The other businesses, and we have been seeing the inflection in FY2025. You look at the historic numbers and we have been able to record quarter-over-quarter sequential growth. We're going to be guided one quarter at a time, but we're seeing the trajectory. As Mark gave the details, we will continue to see the data center growth, even factoring in the ACC or CopperEdge headwind. The consumer, the high-end consumer, we will have the tailwind for the seasonality. Sequentially, in our guidance for Q1, the industrial part will probably see a little decline. The trajectory, we see the business fundamental is there and is very favorable. We have taken care of the inventories issues. I think whatever we see going forward is going to be the true fundamental from the business. I'm very optimistic about that. Congratulations, guys, and thank you for your answers. Thank you, Harsh. Thanks, Harsh. Our next question comes from Tim Akure with UBS. Please proceed with your question. Thanks a lot. I'm wondering if you can help us just on sort of pinpointing the timing on this upcoming step change in the revenue inside of data center. I know given this push out in ACC, you are, though, winning on a couple of other platforms. I'm just wondering if you can help us shape sort of in fiscal 2026, when is that step change going to happen? Thanks. Thank you, Tim. Yeah, as I said, the data center, we got a pretty broad portfolio, CopperEdge and FiberEdge and with TriEdge product. The fundamental of the CapEx spending by the CSPs is still there. We expect the FiberEdge continue to grow. The CopperEdge is going to be a little bit bumpy. Temporarily, we have an air pocket. Once all the other customers, they start kind of like ramping up in the volume, we'll see the accelerated growth. All in all, if you look at the data center portfolio, we still expect quarter-over-quarter growth. As for the timing of the CopperEdge recovery from that specific anchor customer, I think it depends on the next generation rack design timing. That is a, I'd like to help on whatever we can, but we can't control that timing. Right, right. Okay. I guess the second question is sort of an update on the portfolio rationalization plans. Is the current uncertainty in the market, obviously what's happened in the last couple of weeks, I would assume that makes that maybe a little more challenging. Can you speak to sort of how price-sensitive you'll be in this? I mean, is the idea just that you want to rationalize the portfolio, not at any price, but I'm just kind of wondering how price-sensitive you'll be given some of the market uncertainty we've seen the past couple of weeks? Thanks. Great, Tim. We don't have a specific timeline. As you know, our balance sheet has been significantly strengthened. From a longer run and strategic point of view, we still would like to rationalize and kind of like do having our portfolio aligned with our strategic vision and margin profile. The business has inflected, and I think the good buyer, they will see the synergy for their side. I would say this business needs to be bought rather than be sold, namely that we don't have to sell it. If the buyer sees the strategic synergy for them in adding to their portfolio being transformational, this can be a great addition to them. We are patient, but I know there are tailwinds because, as in the prepared remark, one industrial participant based in China was put on the DOD Section 1260H list, and another Europe-based competitor exited the cellular module business. So really, the demand we're seeing, the booking activities, has accelerated. That's a really good business. It's contributing to positive EBITDA, and we are not in a dire situation of having to do the sale. This is not a distressed asset. We welcome buyers to see the synergy into their, it's a nice addition to their business. That would be the basic principle for us to run this process. Perfect, Hong. Thank you. Thank you. Yeah. Our next question comes from Quinn Bolton with Needham & Company. Please proceed with your question. Hi, Hong and Mark. Congratulations on the nice results. I guess, Hong, maybe just a quick clarification on your data center comment. You mentioned that business growing quarter on quarter despite the CopperEdge air pocket. Was that a comment specific to the April guide, or is that a comment that you see continuing throughout all of fiscal 2026? Nice question. Good question. We will only give the guidance on one quarter at a time. That is a specific guide to our April quarter. In general, we go with the market trend. If the CSP CapEx spending continues to be strong, we have been benefiting from that trajectory and scored a very strong year-over-year growth from FY24 to 25. If the CapEx continues to be as projected, and I will not be surprised that we will have a strong growth year-over-year as well. Got it. The second question is, I'm not sure if you're willing, but was wondering if you might be able to give us some sense of the general breakdown of the data center business. You mentioned it was $50 million in the January quarter. It sounds like CopperEdge was probably a very high single-digit million, maybe approaching $10 million, but the rest of the business probably $40 million plus. Can you give us a sense how much of that $40 million plus is FiberEdge just going into DSP-based optical modules? How much maybe Tri-Edge and then other revenue? Just trying to get a sense of what that mix looks like. Quinn, I think it's important for us to focus on our data center portfolio rather than individual SKUs. I mean, needless to say, there's strong broad-based growth across our portfolio. We did mention in our prepared remarks that FiberEdge net sales for our fourth quarter were at record levels. Definitely strong market acceptance and market adoption of that FiberEdge portfolio. Maybe Mark, just a quick follow-up. Could you say is the majority or perhaps the vast majority of the known coverge business f 400, 800 gig modules that may be targeting slower speed applications in the data center? Again, just trying to get a sense. There's pretty strong demand for 400, 800 gig and soon to be 1.6 giga optical modules. Just want to try to get some sense how much of your business is exposed to those higher speed optical modules. Quinn, broadly, 400 gig, 800 gig. Yes. Broadly, that's where we have a good sense of growth. Then at slower speeds as well, but that 400 gig to 800 gig is a good growth for us. Got it. Okay. Thank you. Yeah, that's a sweet spot. And 1.6T is still early. It's more in the design phase and low volume. So it's 400 gig and 800 gig. There's a sweet spot of a FiberEdge revenue contribution. Thank you. Thank you. Our next question comes from Christopher Rolland with Susquehanna. Please proceed with your question. Hey, guys. Thanks for the questions. My first are on IoT and LoRa. I don't know if you guys can frame the impact of u-blox and the block on the China list, what that means for that business. LoRa seems like a lot of upside there. That $37 million number, is that just pure LoRa modules, or are there routers and stuff in there? It seems like that was a big uptick. Is that sustainable moving forward? Thank you. Thank you, Chris. Let me try to answer your LoRa question first. The $37.1 million is all LoRa, and we do not provide modules. We provide LoRa chips, transceiver chips to the module manufacturers in our different generations product. It just provides additional functionality and the inclusion of different radio protocols to make the ecosystem partners use our product easier so that we enable, provide that level of enablement. Most of the LoRa devices at this point are end devices, not gateway devices, because they get a pretty good coverage and a gateway. Also, there are many different applications that are point-to-point. As for the IoT business, and certainly you named the u-blox and then we named the European participants. Yeah, their announcement has provided a tailwind for us. We share the same customers, and we're getting the same customers calling us and asking for continued support and accelerated delivery. That is totally helpful. The China-based company, the DOD list certainly provides another level of tailwind. There are some customers in the past, they have shifted effort to design our product into their routers and gateways, but they took us as an approved vendor just in case they could not buy from that company, they will buy from us. Now we are seeing some tangible shift. In because some of the, for example, some of the applications they can use for commercial applications, they can be installed in a military base. Clearly, they wanted to use the same modules for both applications, and they wanted to source from Western suppliers like us. We will be benefiting from that even more going forward. Right now, we're seeing more design wins, but those design wins are going to be converted into orders and bookings throughout the year. Excellent. Sorry for misspeaking on modules versus chips. I did know that, but is LoRa, these levels sustainable from here? As a follow-up for some handset-related questions on either TVS or proximity sensing, as you look out this year, next year, how do you view kind of your opportunity set in these markets moving forward? Would you consider them better than market growth, or how would you consider them? Thank you. Yeah. Thank you. Yeah. On the LoRa and certainly the Q4 was very strong, and there might be some factor in there for kind of like some project-based demand. In general, if we zoom out a little bit year-ov Y er-year basis, we have been experiencing very strong growth. I will think based on the momentum, based on the customer engagement activities, based on the new use cases we learn from our creative ecosystems and customer base, I am pretty optimistic for the year-over-year growth from FY2025 to 2026. For the TVS and PerSe product for cell phones and smartphones, I believe we are gaining shares. That has been supported by the year-over-year revenue growth and double digits. Certainly, that is higher than the smartphone market itself. a quarter-to-quarter basis, you're still going to be seeing a little bit of seasonality impact. In general, we are getting more design wins, and we are gaining shares from our competition as well. Thanks so much, Hong. Thank you. Thank you, Chris. Our next question comes from Cody Acree with The Benchmark Company. Please proceed with your question. Thanks, guys, and congrats on the progress. Mark, for you, if you can just talk about your gross margin expectations for the year, and maybe also if you can expand on your OpEx expectations for the year. Cody, we'll just emphasize we're only guiding one quarter out, so beyond our guide. We don't have that much commentary other than we've seen very strong year-over-year growth in our gross margins. Given that we're looking at some additional data center growth, we do see that those are typically higher than our corporate gross margin averages, so equated to total gross margin. On OpEx, we've got it one quarter out. I'll just say that we're remaining prudent in our R&D spend. R&D is prioritized to customer alignment and what we believe will be near-term revenue growth. Yeah. If I can add some color. Cody, on the OpEx side, you see the incremental increase in our Q1 compared to Q4. If we kind of like double-click on that, SG&A is going to stay largely the same. Over the year, we wanted to have more efficiency and leverage with increased revenue. We plan to use AI right now. That is a hot topic, but we really see the benefits for some efficiency and productivity improvement. We do want to increase the R&D spending in our FY26 compared to FY25. Over the last three quarters since I took the position, we had conducted multiple critical reviews on the programs, on the return on the R&D programs. We canceled a number of it so that we can make the fund available to programs with better opportunities. We did that and has been largely successful in FY26. Going forward, we have more opportunities. Just by shifting the focus a little bit may not be enough. We wanted to increase our R&D spending in this new fiscal year, but as Mark said, in a very disciplined fashion. We definitely wanted to make sure we will review the return on the investment. We'll review the alignment with the market frequently so that if we need to do any adjustment or course correction, we'll do it decisively. In general, we see many opportunities, and we wanted to really capture those opportunities to accelerate the growth. We will see the R&D spending for Q1 is going to be increasing a little bit from Q4. Other part of the OpEx, we wanted to make sure we can get efficiency out of them. Thanks for that, guys. Hong, if you can just continue with that thought, then can you elaborate on your product priorities then for 2026, where your R&D spending is going to be focused, and where do you think your growth is going to be most derived from? Good question, Cody. We certainly wanted to focus our R&D in the area that we have demonstrated very fast growth, and we have a better alignment with our customers, and we have opportunities identified. Largely in the data center area, in the LoRa area, and in some selected IoT areas as well. Of course, the new emerging trend, well, not an emerging trend. Among our portfolio, like a person sensing, it's quite exciting because the SAR standards requirement is elevating. That provides opportunities for us to provide solutions to our customers with our technical differentiation. The same product can be used in the gesture control for the smart wearable devices, and that is an emerging opportunity. In the beginning, we were just kind of like provide a solution to it, but now that can be, if it's really materialized, the next generation compute platform with an AI form factor. The robots, we know our person sensing product has been incorporated in many companies in their robots designs. That's pretty exciting opportunities, and we will be increasing R&D investment to create extended bandwidth in addressing the market need for that application. Great. Thank you, guys. Thanks, Cody. Thank you. Our next question comes from Tristan Gera with Baird. Please proceed with your question. Hi, this is Tyler Ahn for Tristan. Thanks for taking the questions. Maybe back on LoRa, could you provide an update on where LoRa inventories are? Do you think you're shipping back in line with demand? Also, if you could help with the timing of the ramp for the Mercedes factories, that would be helpful. Thanks. Yeah. Tyler, not just with LoRa, but across our portfolio, we are monitoring channel inventories. We try to keep channel inventories in line with expectations. That goes for LoRa too. We're really shipping to what we believe is expected demand. LoRa deployment across the industrial portfolio, that example you provided, that Mercedes deployment, that occurred already. Right now, LoRa is being deployed across a number of IoT applications, metering, asset tracking, factory automation. Great. Maybe for my follow-up one on the data center, could you just provide a little more color on where you're seeing LPO opportunities medium term? Yeah. Tyler, the LPO opportunities near term is going to be primarily on the 800G or 100G per channel. We have been providing our TIAs and driver solutions to many optical transceiver module manufacturers. There are some strong CSPs at the end user to drive the adoption for it. As for 1.6 terabit, I think at this point, the industry is primarily focusing on LRO solution, namely in the transmitting end. They will still use the DSP-based retimed solutions. The receiving end, they will use the linearized solutions. LRO, we will have our TIA in the receiving end, but we do not have the driver. Driver typically comes from the DSP side. The 800 gig LPO, on the other hand, we will have the TIA content on the receiving end together with the driver content on the transmitting end. At the OFC, you are going to be seeing multiple demos that our customers and the partners are using our solutions to design and plan to go into the production on the 800 gig LPO and 1.60 LROs. Great. Thanks again for taking the questions. Thank you, Tyler. Our next question comes from Craig Ellis with B. Riley Securities. Please proceed with your question. Hi. This is Stacy Cho Ahn for Craig. Thanks for taking the question. I was wondering if you could just give a little clarification for the announcement with currently one competitor being placed on the end of the list. How has that been materialized so far in lifting the Sierra business, and how would that affect the business strategically? Y eah. Stacy, thank you for that question. One competitor was placed on the 1260H list. That means really many of our customer base, when they have the product used for in-due use situation, they do not want to use the modules from that supplier in China. That definitely has translated into a significant increase in booking. As I said, that booking, a significant increase in design wins, and the design wins is going to be translated into the bookings throughout the year. Okay. Got it. Thank you for the question. The second question, I guess, is going back to kind of the design process, how long are these onboarding conferences can last, and how many AI server generations can that socket remain? I see. The design for onboard solutions is actually going to be shorter than the design in the cable because the onboard solutions are typically done by the end customers directly. They do not need to go through a third-party supplier. The design cycle, like anything, typically 6-18 months. It depends on the number of iterations they will have. You probably will be learning more about the timing in the next week's conference they are going to be hosting. Got it. Thank you so much. Thank you. Our next question comes from Kyle Smith with Stifel. Please proceed with your question. Hi, guys. This is Kyle Ahn for Tory at Stifel. Congrats on two straight quarters of positive free cash flow. How should we think about free cash flow heading into fiscal 2026? Maybe building off of that, if you could provide general expectations for both operating cash flow and capital expenditures, that would be great. Hey, Kyle. Thanks for the question. We'll say that we're only cutting one quarter out, but you can see the strong cash flow generation that we had in Q4, and we had sequential increases in cash flow generation from Q4 to Q3. Definitely strong business fundamentals do help with the growing business, but also with our reduction in debt. We previously announced $40 million in annual cash interest savings. That's definitely a tailwind to our operating cash flow metrics. That operating cash flow, we only had a partial quarter of benefit in our Q4. You can expect, or I expect, that there's going to be some incremental cash flow benefits over the year. Again, we're only cutting one quarter out, but I would think that historical CapEx is a reasonable proxy going forward for future CapEx requirements. Great. Thank you. As my follow-up, could you maybe provide an overview of the unbundling trend you're seeing within the TIA market? Do you feel you can capture majority share within the unbundled TIA market in the next few years? Yep. We can see the prior commercial arrangement from the industry participants and usually leverage the availability and shortages of DSPs. They wanted to sell DSP and TIA together. I think with the more availability of the DSP supplies and the number of providers out there, this kind of bundling practice is no longer in place. That provides great opportunities for us to play in the leveled market, playing field. We have been gaining market shares, but I think we still have a way to go. The good thing is our TIAs have been broadly regarded as the best solution in the industry, serving 200 gig, 400 gig, 800 gig, and 1.6T. We have multiple form factors, and I anticipate that trend will continue. Congrats on the quarter, guys. Thank you. Thank you. Thank you. Our next question comes from Harsh Kumar with Piper Sandler. Please proceed with your question. Yeah. Hi. Thanks for a chance to follow up. I was curious, Mark or Hong, what is making LoRa jump up so significantly, so fast? Are you seeing some kind of new deployments or activity? Maybe you could help us understand what geo or what kind of applications without giving us too much specifics. Yeah. Harsh, that's a great observation. We're really pleased with the results. I think it's largely due to the customer focus. The business in LoRa has been autopiloting for a while. Now we put a very concerted effort in developing new products and providing enablement support and really engaging with the customers very closely. It is clear that LoRa has demonstrated very strong differentiating capabilities compared to other RF protocols. Customers are developing different applications. There is a lot of innovation going on there. When people talk about this, it is a lawn mower and robots and metering, that's the space. We have demonstrated a very strong demand, but there are new applications being developed. I think we are accelerating the growth through new product offering and ecosystem enablement and a customer focus. Understood. Thank you. Thanks and congratulations again. Thank you. Our next question comes from Quinn Bolton with The Benchmark Company. Please proceed with your question. Hey, guys. Just wanted to ask a quick question on the PON business. Just looking at the overall signal integrity revenue and your comment, the data center was up to $50 million. Looks like you probably saw a meaningful step down in the PON business. Just wanted to see if you could confirm that. If that's the case, is that just sort of timing between different tenders? Is that a seasonal effect? I have a quick follow-up. Yes. Quinn, for Q4 results, it was actually year over year the PON was growing. As for our guidance, say in the SIP area, the signal integrity product, overall, is going to grow. The data center is going to grow. Pond and it has some timing thing related to the tender offers. Okay. Okay. I am not sure if you care to comment, but your growth for signal integrity or, sorry, data center in particular for the April quarter, just wondering, do you expect the CopperEdge business to be effectively zero in that quarter? Because if so, it obviously implies some really strong growth outside if the overall bucket is going to grow quarter on quarter. Just wondering if you could just directionally, is CopperEdge still several million dollars? Is it zero? Just any help, just to sort of think about growth outside of the CopperEdge product? Got it. Thank you, Mark. Thank you. There are no further questions at this time. I would now like to turn the floor back over to Mark Quinn for closing comments. Thank you, everybody, for joining. Please visit our investor website at investors.semtech.com where we post upcoming investor conferences where Semtech will be in attendance. Have a great day. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.