Luke Young

Luke Young inquired about current trends in the power business, specifically regarding EV and data center drivers, and how these align with full-year expectations, asking for a breakdown of anticipated growth.

Answer

President and CEO John DeGaynor clarified that EV headwinds, particularly from delayed or canceled launches, have largely been absorbed, noting that North American EV exposure is limited. He expressed optimism for data center growth and the impact of vendor-managed inventory but stated guidance would not be adjusted until EDI is locked in. CFO Laura Kowalchik and Mr. DeGaynor further explained that second-half strength is expected through EBITDA conversion, driven by significant operational improvements and cost reductions in key facilities like Egypt and Mexico.

Luke Young with Robert W. Baird & Co. asked about the sequential and year-over-year performance of the Powersemi business, including its outlook, book-to-bill ratio, and expected margin flow-through.

Answer

President and CEO Greg Henderson emphasized Powersemi's strategic importance and ongoing efforts to improve internal execution and go-to-market strategy. EVP and CFO Abhi Khandelwal confirmed sequential improvement in Q3 2025 compared to Q2 2025, despite a year-over-year decline. Luke Young also inquired about the $0.40 stock compensation impact in Q4 2025. Abhi Khandelwal clarified this was primarily due to variable compensation resetting to target after no payout in 2024, expecting normalization in 2026. Finally, Luke Young asked for an update on data center initiatives, including near-term opportunities and progress on future architectures. Greg Henderson highlighted strong momentum, early success from sales realignment, and a more than 2x increase in year-to-date design wins, contributing meaningfully to current revenue growth.