Karl Ackerman • BNP Paribas

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CFO Luis Visoso reiterated the guidance for flattish bit shipments in the June quarter. For the second half of 2025, he stated there's no change to the previous view of high single-digit growth, expressing optimism about long-term demand drivers. He added that visibility is good, with transactional markets showing price increases and progress being made across client and cloud.

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Chairman & CEO David Goeckeler provided specific content growth forecasts, with PC capacity growth accelerating from mid-single digits in 2025 to mid-to-high single digits in 2026. While not providing a specific forecast for data center growth, he noted that higher-than-expected demand for qualification samples is a positive leading indicator for the business.

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CEO Seamus Grady clarified that the HPC program is a new, separate reporting category and is not included in the Datacom figures. He explained that while their main customer is focused on 1.6T, broader Datacom opportunities exist for both 800G and 1.6T across other customers, merchant suppliers, and direct hyperscaler engagements.

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CEO Seamus Grady explained that the Amazon warrant had a one-time impact of about $4 million, or 40 basis points, on Q3 gross margin. He noted that without this, margins would have been consistent with the prior quarter. For Q4, he anticipates some short-term margin headwinds from significant new product ramps and start-up costs, which are positioning the company for strong growth in fiscal 2026. He added that foreign exchange headwinds were already factored into guidance and are expected to be flat in Q4.

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CEO Seamus Grady explained that while telecom revenue is strengthening due to DCI products and new program wins, it's difficult to predict the exact timing of a new record. He confirmed the largest new system wins are not yet major contributors. Grady also clarified that the significant growth in silicon photonics is primarily driven by coherent ZR transceivers for data center interconnect (DCI) applications.

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CEO Seamus Grady explained that while long-term datacom trends are positive, there has been a mix shift between 400G and 800G with their largest customer as they transition to 1.6T. He confirmed that the 400G strength is driven by both this mix shift and a new business win with an existing customer.

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CEO Jim Anderson clarified that the 6-inch indium phosphide line supports multiple products beyond EMLs, including CW lasers. He stated that for supply chain resiliency, Coherent will continue to use a mix of internal and external EML sources. He affirmed that the company's target is to grow in line with or faster than the range provided at the Investor Day and that they are actively adding capacity to achieve this goal.

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CFO Sherri Luther explained that the benefits from portfolio optimization are more long-term and that the actions taken in Q3 did not have a significant direct impact on the quarter's P&L, though R&D spend has already been shifting towards core growth engines. CEO James Anderson stated that Coherent continues to see strong short- and long-term demand signals for datacom transceivers from customers and is focused on gaining market share, not just matching market growth.

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CEO James Anderson stated that the company is not capacity-gated, praising the supply chain team for tripling indium phosphide output year-over-year to support strong datacom growth. CFO Sherri Luther explained that OpEx is expected to increase due to strategic R&D investments for long-term growth, while the company maintains discipline on SG&A to drive operating leverage. She directed investors to the upcoming Investor Day for a longer-term model.

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CEO James Anderson responded that supply chain resiliency, including geographic diversity and vertical integration, is an increasingly important factor for data center customers and a key differentiator for Coherent. He acknowledged the expanding TAM opportunity from new data center architectures but stated that a quantification would be provided at the company's Investor Day in May.

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CEO Chuck Robbins ranked his conviction as: 1) Service Provider/Cloud, 2) Enterprise, and 3) Public Sector, while noting a forecasted return to growth in Federal. On Silicon One, he stated the goal is to drive adoption as fast as possible and agreed the three-year assumption for it to reach half of switch ASICs is 'not too far off'.

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CEO Chuck Robbins estimated enterprise AI orders are accelerating and are in the 'hundreds of millions' of dollars, noting many joint NVIDIA solutions are still pending rollout. Regarding CPO, he stated Cisco has already demonstrated the technology and will be ready to deliver it as soon as customer demand for its power and speed benefits materializes.

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CEO Chuck Robbins estimated enterprise AI orders are accelerating and are in the 'hundreds of millions' of dollars, noting that solutions from the NVIDIA partnership are still rolling out. Regarding CPO, he stated that Cisco demonstrated the technology in 2023 and will be ready to deliver it as soon as customer demand, driven by power and speed requirements, makes it viable.

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CFO Scott Herren clarified that the year-over-year OpEx growth is primarily driven by the addition of Splunk, and that savings from the recent restructuring are being reinvested into high-growth areas like AI and security. CEO Chuck Robbins confirmed the strong hyperscaler growth was not from a single customer but was balanced across four of the six largest players, and the AI infrastructure business was also balanced across them.

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President and CEO Stephen Daly explained that the strong DCI business is performing well, and the slight quarter-over-quarter change in the overall Telecom segment is related to backlog management and timing, emphasizing the strong year-over-year growth. For SATCOM, Daly reiterated that the company is in the engineering model phase and expects production could start as early as the end of the calendar year, depending on customer reviews.

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President and CEO Stephen Daly stated the large SATCOM program is on track, with the R&D phase nearly complete and a production ramp expected near the end of the calendar year. Regarding European defense, Daly confirmed that direct exposure is growing, catalyzed by the acquisition of their MESC facility in France, which provides a platform to engage with European defense contractors and recently secured a significant pilot order for a large radar program.

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President and CEO Stephen Daly clarified that MACOM has exited the commercial silicon photonics space and now acts as a merchant supplier of CW lasers and other components to customers developing their own solutions. On the second topic, he stated an expectation for continued government funding for satellite programs due to national security needs. He noted that while the PON business is slowly improving, he could not directly correlate it to BEAD funding initiatives.

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CEO Stephen Daly confirmed broad market interest in ACCs at lower data rates and clarified that MACOM categorizes AECs within its ACC bucket. For long-term Telecom growth, Daly highlighted SATCOM as having tremendous potential. He noted near-term strength is from SATCOM and US 5G deployments, while wireline (CATV, PON) is slowly recovering. He stressed that gaining market share as competitors exit and increasing engineering capacity through acquisitions like ENGIN-IC are key to overall growth.

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CEO Paul Bay confirmed that both the server and cybersecurity businesses were strong during the quarter. He explained that the CloudBlue divestiture was a strategic decision to focus on the unified xVantage platform, noting that Ingram Micro retained all relevant IP from its foundational cloud investments. EVP & CFO Mike Zilis added that from a financial perspective, CloudBlue was an immaterial part of the company's overall cloud business results.

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CFO Mike Zilis clarified that while Q2 guidance assumes less robust growth in client endpoint solutions compared to Q1, it still factors in growth in servers, cybersecurity, and cloud. He highlighted that networking returned to modest growth for the first time in five quarters. Regarding working capital, Zilis reiterated that they will continue to invest for growth, which could strain free cash flow in the short term, but this will be balanced by normal seasonality, such as the typical Q3 inventory build for a strong Q4.

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Chairperson & CEO Jayshree Ullal gave a direct "yes," confirming the expectation that all four top cloud titans will have deployed Arista for back-end networking by 2026. She added that for neo-clouds, the opportunity is almost always a combination of both back-end and front-end networking.

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CEO Jayshree Ullal affirmed that 2025 is 'the year of 800 gig,' following the 400-gig cycle in 2024. She confirmed that increased activity around the 800-gig Etherlink portfolio, introduced in late 2024, is a key driver for both current shipments and the growth in the deferred revenue balance.

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CFO Chantelle Breithaupt stated that Arista does not provide guidance for individual business components like services. She advised that the historical trend over the last few years is the best indicator for future performance, keeping in mind that services revenue timing can lag product sales, especially in the post-COVID environment.

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CEO Jayshree Ullal stated that the majority of current AI trials and pilots are being conducted on 400-gig platforms. This is because the broader 800-gig ecosystem, including NICs and standards like UEC, is still maturing. She expects to see a more balanced split between 400-gig and 800-gig deployments as 2025 progresses.

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CEO Irving Tan reported that a third hyperscaler has now qualified Ultra SMR, with a fourth in process. He noted new workloads are typically deployed on the highest capacity drives. Regarding capacity, Tan explained that long-term agreements (LTAs) provide crucial visibility, and the company's focus is on increasing areal density through technology rather than adding significant physical capacity.

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CEO Irving Tan responded that exabyte growth is primarily driven by technology and aerial density improvements, such as their UltraSMR technology, which allows for capacity increases without significant CapEx for new production units. He also noted growth opportunities in sovereign and private clouds and confirmed the company has not seen any demand pull-forward from customers ahead of potential tariffs.

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Incoming Western Digital CEO Tiang Yew Tan confirmed that the outlook for nearline HDDs remains healthy. He stated that qualifications for the new high-capacity drives are expected to be completed in the first calendar quarter, noting that customers are 'very excited' about the new products and that more visibility would be provided as the ramp progresses.

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CEO David Goeckeler stated that customers generally want to deploy the densest drive possible, suggesting the new 32TB drive will be adopted quickly post-qualification. Regarding capacity, he explained that the company sized its infrastructure to satisfy expected market unit demand and is focused on increasing exabytes through density innovation rather than expanding its physical footprint, emphasizing the importance of customer demand visibility for future planning.

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SVP & CFO Grant Brown confirmed that the Richardson facility has ample room for the new SAW line, as ongoing die-size reductions have effectively increased manufacturing capacity. Regarding the full-year outlook, he affirmed that the question captured the main considerations and acknowledged that the company's view could prove conservative depending on how unit volumes and product mix play out over the year.

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Frank Stewart, President of the Advanced Cellular Group, confirmed that content growth is broad-based. While the ET PMIC is unique to the internal baseband, wins in other product categories apply across both internal and third-party baseband models. CFO Grant Brown stated that the company has made 'really good progress' in reducing inventory, which is unlocking free cash flow, and they do not see any abnormal inventory issues.

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CEO Bob Bruggeworth responded that historically, every successive phone model has required more advanced RF, a trend he expects to continue regardless of the baseband modem source. SVP of Sales and Marketing Dave Fullwood added that the primary difference for Qorvo would be the inability to supply its ET PMIC to a competitor's platform, which represents a key opportunity if the customer were to use an internal modem.

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SVP of Sales and Marketing, David Fullwood, explained that the shift to entry-tier Android is the primary headwind, as Qorvo is concentrated in the high and mid-tiers. He noted that in the entry-tier, discrete solutions are more prevalent, pricing is tougher, and customers often outsource these phones to the ODM channel, where Qorvo does not traditionally participate. This outsourcing of 5G entry-tier phones directly reduces Qorvo's available market.

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President and CEO Rob Mionis stated that every 400g customer has transitioned to 800g, with Celestica's market share for 800g being larger. CFO Mandeep Chawla added that 800g volumes reached parity with 400g in Q2 and are accelerating, with wins across their top three hyperscalers. Chawla also confirmed ample capacity to support an additional $3-4 billion in revenue, citing investments in Thailand, Malaysia, Mexico, and Richardson, Texas.

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CEO Kishore Seendripu stated that order visibility is strong across all segments, with the main variable being the timing of optical qualifications. He noted significant traction for Panther SoCs with enterprise players and hyperscalers, projecting revenues could triple next year.

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CFO Steve Litchfield clarified that the 'doubling' comment from CEO Kishore Seendripu referred to the wireless infrastructure business, not broadband. For broadband, he expects a solid recovery this year followed by growth from new wins. Dr. Seendripu explained that strong bookings are tied to the core business recovery and that the tariff situation is primarily a U.S. broadband concern, as most other business is international.

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CFO Steve Litchfield confirmed the previously guided $5 to $10 million impact from China restrictions was felt in the back half of the year but that the issue is now behind them. CEO Kishore Seendripu explained that while momentum for PON is building, significant revenue from new gateway solutions is expected to materialize in the latter half of 2025 and grow into 2026 and 2027, rather than being pulled forward.

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EVP and Chief Business Officer Sumit Sadana clarified that the improved 2025 DRAM outlook is driven by both robust AI-related data center growth and a recovery in broad distribution and industrial markets, not tariff pull-ins. EVP & CFO Mark Murphy stated that with record liquidity and reduced net debt, Micron can invest in technology and capacity, grow its dividend, and conduct opportunistic buybacks, noting the balance sheet is in a 'great spot'.

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EVP and Chief Business Officer Sumit Sadana clarified that the improved 2025 DRAM outlook is not due to tariff pull-ins but is supported by robust AI-driven data center growth and strengthening demand in industrial and distribution markets. Executive VP & CFO Mark Murphy stated that with record liquidity and reduced net debt, Micron can invest in business priorities like HBM capacity, maintain its dividend, and conduct opportunistic buybacks, noting the balance sheet is in a 'great spot'.

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Chief Business Officer Sumit Sadana clarified that Micron's own supply growth will be less than demand growth, leading to inventory reduction, not that the entire industry will ship below demand. He explained the HBM trade ratio constrains non-HBM DRAM supply. EVP of Global Ops Manish Bhatia added that while they aren't guiding for FY26 CapEx, investments are underway for a new HBM facility for 2027 output, but core DRAM wafer spending will remain disciplined.

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CEO Hock Tan clarified that while many scale-up interconnects currently use copper, a shift to optical is inevitable as clusters grow larger. He positioned CPO as one potential path for this transition but not the only one, with low-cost pluggable optics being another viable option. He stated the key event is the move from copper to optical, which he expects within a year or two, and that Broadcom is prepared for either form factor.

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CEO Hock Tan clarified that the critical transition for larger AI clusters is the move from copper to optical interconnects, which he expects within a year or two. He noted that while CPO is one path Broadcom is developing, it is not the only solution. The initial move to optical could also be served by low-cost pluggable optics, and the key opportunity lies in the medium's shift from copper to optical fiber.

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CFO Kirsten Spears clarified that the IP relocation was a matter of timing and is not related to any asset sales. She explained that the charge is non-cash and is offset by a deferred tax liability, resulting in a very small cash impact.

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CFO Jim Moylan gave a direct "yes," confirming that Ciena expects to sell more capacity into its line systems next year, which provides confidence in future margin improvement. Executive Advisor Scott McFeely added that Ciena owns the IP for all key transceiver ingredients and will increasingly use its own components as volume ramps, which is a core part of its cost-reduction plan.

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CFO Dan Fleming clarified that the increased CapEx is driven by internal technology development, specifically production mask set tape-outs for advanced nodes like 3nm, rather than specific customer contracts. CEO Bill Brennan addressed the application question by stating that Credo's AECs are used broadly to connect any type of GPU to any switch and should not be viewed as a proxy for any single compute architecture.

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CFO Dan Fleming attributed the gross margin improvement primarily to the benefits of scale, noting that product gross margin (excluding engineering services) rose over 900 basis points year-over-year. He also mentioned the roll-off of contra revenue from a warrant with Amazon as a lesser, but accretive, factor. Fleming confirmed that the referenced future 10%+ customers are AEC-related, as it is the largest driver of absolute revenue growth.

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CEO William Brennan stated that the IP business will remain a small, lumpy part of revenue and is not expected to cross the 10% threshold in Q3. CFO Dan Fleming confirmed that the customer base in the 5-10% revenue bracket is broad-based, with contributions from AEC, Optical DSP, and line card retimer products, demonstrating successful revenue diversification.

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CEO William Brennan positioned ACCs as a niche, non-standard solution with limited broad market appeal, asserting that fully retimed AECs are the preferred choice for interoperability and performance. CFO Dan Fleming stated there is no seasonality in IP revenue and reaffirmed the 10-15% of revenue target for FY25 and FY26, suggesting it might be reset lower in the future as product revenue scales significantly.

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CEO Philip Brace and CFO Kris Sennesael explained that the current guidance reflects their assessment of the dynamic tariff environment and they do not see a major direct impact due to their diversified global supply chain. They added that CapEx plans remain unchanged, as spending is focused on new technology development rather than production capacity.

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CFO Kris Sennesael explained that while core technology can be leveraged across mobile and broad markets, specific products for the largest customer are proprietary. He confirmed they are selectively pursuing the high-end Android market. He also stated that approximately 15% of the largest customer's revenue comes from non-phone products, and this segment is expected to continue growing.

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CFO Kris Sennesael stated that internal inventory has been reduced for seven consecutive quarters and can be reduced further, which, while the right long-term action, currently weighs on factory utilization and gross margins. CEO Liam K. Griffin addressed capital strategy, emphasizing that the company's strong cash flow provides excellent optionality. He affirmed that Skyworks remains disciplined and continuously evaluates the optimal mix of M&A and shareholder returns.

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CEO Michael Hurlston and President of Cloud and Networking Wupen Yuen denied any demand pull-forward, stating the growth is tied to new GPU and accelerator ramps and catching up on supply after resolving earlier production issues. CFO Wajid Ali clarified that the manufacturing shift from contract manufacturers to in-house is for data center interconnect (DCI) products, supported by CapEx committed 6-9 months ago to increase capacity by 50% by year-end.

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President and CEO Alan Lowe clarified the new customer wins are for speeds below 1.6T, as 1.6T is more of a late 2025 or 2026 ramp. He confirmed that the lack of indium phosphide for both EMLs and CW lasers is a gating factor for the broader module market. EVP and CFO Wajid Ali added that CapEx in the second half of the fiscal year will be similar to the first half, with investments focused on expanding EML chip capacity to address these ongoing supply constraints.

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SVP and CSO Chris Coldren clarified that these are new opportunities, not reallocations, though customers value Lumentum's U.S. headquarters and non-China manufacturing. He noted the initial transceivers for these wins do not integrate Lumentum's EMLs, as those designs were already in progress, but future opportunities for vertical integration exist.

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CEO Dave Mosley clarified that the production capacity issue affected the non-HAMR drives, specifically the ramping 24/28TB platform. Regarding visibility, he stated that the build-to-order models already provide good visibility, and for those customers, the temporary supply issue is largely irrelevant to their long-term plans.

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CEO Dave Mosley addressed the SMR question by stating it's a configuration for a few specific cloud and client server customers, and he views it as part of a flexible technology set to meet customer needs. CFO Gianluca Romano clarified the build-to-order agreements, stating that while there are different types, the 'vast majority are orders that are fully committed by customers out in time.'

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CEO Matt Murphy stated that Marvell's market share is high, so they are engaged with nearly every major customer. He confirmed that supply chain diversification due to geopolitical risk is a real concern for hyperscalers. However, he noted this trend has been underway for years, with both international and U.S. suppliers adjusting their supply chains. He believes Marvell is well-positioned to work with all partners and does not foresee a major share shift from this dynamic alone.

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