Mark Delaney

Mark Delaney asked about Innoviz's 2026 guidance for 2-3 new program wins, seeking clarity on their origin and conversion proximity. He also inquired about the status of the SOW with a top five auto OEM and the booking coverage for the projected 10% non-automotive revenue in 2026.

Answer

Omer Keilaf, CEO, Co-Founder, and Director, explained that new wins are expected from several tangible Level 4 and Level 3 programs. InnovizTwo is offered for earlier launches requiring mature, automotive-grade products, while InnovizThree targets behind-the-windshield deployments, with decisions expected in the second half of the year. He confirmed the SOW with the top five auto OEM is complete, with next steps under discussion. For non-automotive revenue, he stated that part is booked, particularly from the security market where Innoviz's high-resolution, long-range LiDAR offers a significant advantage, and an ultra-long-range LiDAR is in development.

Mark Delaney, Managing Director and Senior Equity Analyst at Goldman Sachs Group, inquired about Innoviz's 2026 guidance for two to three new program wins, seeking details on potential sources (Level 3, Level 4) and conversion timelines. He also asked for an update on the SOW with a top five auto OEM and the booking status for the 10% non-automotive revenue target for 2026.

Answer

CEO Omer Keilaf explained that new wins are anticipated from several Level 4 and Level 3 programs, with InnovizTwo targeting earlier launches and InnovizThree for behind-the-windshield applications, with decisions expected in the second half of the year. Regarding the top five auto OEM SOW, Mr. Keilaf stated that it is complete, and discussions are ongoing for potential series production, though conversion timing is uncertain. For non-automotive revenue, Mr. Keilaf confirmed that a portion is already booked, particularly in the security market, driven by Innoviz's high-resolution, long-range LiDAR, and expressed confidence in achieving the 10% target due to strong demand and ongoing efforts, including an upcoming ultra-long-range LiDAR.

Mark Delaney inquired about the progress of the L3 development program with a top five auto OEM for consumer vehicles, specifically what steps are needed to transition to a series production award and the expected timeline for completion. He also asked about recent changes in the competitive landscape, including the declining number of relevant LiDAR players, the impact of a competitor's financial pressure, and the current geopolitical backdrop on business opportunities.

Answer

Omer Keilaf, CEO and Co-Founder of Innoviz Technologies, explained that Innoviz is actively working on the SOVW, having delivered several items, and is in ongoing technical and commercial discussions with the customer before a series production decision. He noted that while the program is in a very developed stage, predicting an exact completion timeline is challenging. Regarding the competitive environment, Mr. Keilaf stated that competitive offers are limited due to geopolitical factors or other solutions failing to meet needs and timelines, resulting in a very restricted landscape for automotive LiDAR solutions.

Mark Delaney asked for an update on the Level 3 development program with a top five auto OEM, inquiring about the progress towards a series production award and the competitive landscape, specifically noting a competitor's financial pressures and geopolitical factors.

Answer

Omer Keilaf, CEO and Co-Founder, Innoviz Technologies, stated that work on the SOVW is in a very developed stage, with technical and commercial discussions ongoing. He also noted that the competitive landscape for automotive LiDAR solutions is very limited due to geopolitical issues or competitors' inability to meet needs and timelines.

Mark Delaney asked about the new development program with a top-five auto OEM, inquiring about the steps needed to convert it into a series production win, the expected timeline for that decision, and potential program details like annual volumes and whether the LiDAR would be a standard or optional feature. He also questioned the company's plans for utilizing the newly announced $75 million ATM program.

Answer

CEO Omer David Keilaf explained that the Start of Production (SOP) is slated for 2027 and that Innoviz is currently finalizing contract details while development work has already begun. He noted the OEM is very large, the program involves several high-volume vehicle lines, and the initial line will feature the LiDAR as a standard fit. Regarding the ATM, Keilaf stated it will be used opportunistically to manage the lumpiness of NRE payments and maintain a strong liquidity position, reinforcing their commitment to minimizing cash burn.

Asked about the new top-five OEM development program, specifically the path to a series production win, potential program volume, and whether the LiDAR would be standard fit. Also inquired about the timeline and usage plans for the newly announced $75M ATM program.

Answer

The company stated the OEM program's SOP is in 2027 and work has begun while contract details are finalized. The program involves high volumes with the LiDAR as a standard fit on the first vehicle line, with potential for expansion. The ATM will be used opportunistically to manage liquidity and buffer lumpy NRE payments, as the company continues to reduce its cash burn.

Mark Delaney of Goldman Sachs inquired about the status of a potential nomination with a major auto OEM and requested more specific details on the company's free cash flow outlook for 2025.

Answer

CEO Omer Keilaf stated that legal discussions with the OEM have concluded and they are awaiting the customer's final decision. Regarding cash flow, CFO Eldar Cegla and CEO Omer Keilaf confirmed the trend of reducing cash burn will continue in 2025, aided by NRE payments and $12 million in annualized savings, but declined to provide a specific quantitative forecast.

Asked for details on a potential deal with a top 10 OEM (legal status, competition, SOP, volume) and about the company's financial profile, specifically cash burn sustainability and potential capital needs.

Answer

The deal with the top 10 OEM is in the final legal stages with only two minor points left to negotiate. They are competing against one other provider, with an expected SOP in the mid-decade. Financially, the company is confident its current cash position and expected new revenues will last well into 2026, supported by improving cash burn, top-line growth, and a strong pipeline.

Mark Delaney asked about the pending program with a top 10 OEM, questioning what legal arrangements remain, if other LiDAR providers are competing, and the potential start of production (SOP) and volume if the program is won. He also inquired about the company's financial profile, cash burn sustainability, and the potential need for future capital raising.

Answer

Executive Omer Keilaf stated that only two minor legal points remain to be negotiated for the top 10 OEM deal and confirmed they are competing against one other supplier, with a potential SOP in the 'mid-decade'. On financials, he expressed confidence that new revenues and NREs would extend the company's cash runway well into 2026. Executive Eldar Cegla reinforced this, highlighting improvements in cash burn, top-line revenue, and gross margins.

Mark Delaney sought clarification on Keysight's second-half 2026 expectations, particularly regarding any implied moderation in growth despite strong Q1 and Q2 guidance, and inquired about the company's supply chain capabilities, especially concerning DRAM and memory availability.

Answer

EVP and CFO Neil Dougherty explained that Keysight has strong visibility one to two quarters out, with the base case for fiscal 2026 being just over 20% all-in growth, implying organic growth substantially above the long-term model even in the second half. President and CEO Satish Dhanasekaran stated that Keysight prepared for business scale based on customer conversations last year, and while memory prices are increasing, the company is not exposed to high-demand HBM volumes and has factored price changes into its outlook, feeling confident in its ability to execute.

Mark Delaney sought clarification on Keysight's expectations for the second half of fiscal year 2026, noting that the 'a little over 20%' full-year revenue growth implies some moderation from the robust Q1 and Q2 guidance. He asked about the assumptions behind this second-half guidance and the level of visibility. He also inquired about Keysight's supply chain capabilities, particularly regarding the availability of DRAM and memory, given the strong demand and volumes.

Answer

Neil Dougherty, Executive Vice President and CFO, explained that Keysight has strong visibility one quarter out and decent visibility two quarters out, with clarity decreasing beyond that. He confirmed the base case for over 20% all-in growth for the year, acknowledging potential for upside if Q1/Q2 momentum is sustained, but currently planning for organic growth substantially above the long-term model even in the back half. Satish Dhanasekaran, President and CEO, stated that Keysight prepared for the scale of business based on prior customer conversations, and the team is scaling disciplined. He noted that Keysight does not have high-volume usage of high-bandwidth memories, limiting exposure to tightness, and that any marginal price increases for memory have been factored into the outlook.

Mark Delaney asked for a breakdown of expected revenue growth across Keysight's different businesses (A&D, Wireline, Wireless, EISG) for FY2026, given the overall expectation of revenue growth at or above the high end of the 5-7% target model. He also followed up on the earlier-than-expected mitigation of the August tariff, asking for more context on what allowed Keysight to achieve this.

Answer

Neil Dougherty, CFO, indicated that AI-benefiting Wireline is positioned to be a significant growth driver. Wireless is expected to grow in line with the 4-6% targeted growth for commercial comms. Industrial businesses (EISG) are also expected to grow 4-6%, with strength in semi and general electronics offsetting continued questions in automotive. Regarding tariffs, Mr. Dougherty stated that Keysight is trending towards the lower end of the $150 million-$175 million annualized tariff range. Strong business performance, faster-than-expected pricing and surcharging mitigations, and the decision to honor pre-tariff orders in backlog allowed for earlier mitigation of the August tariff impact.

Mark Delaney asked for a breakdown of Keysight's full-year revenue growth expectation (at or above the high end of 5%-7% target model) across its different businesses: A&D, Wireline, Wireless, and EISG, to understand which segments are expected to grow at or above that level. He also followed up on the earlier-than-expected mitigation of the August tariff, asking for more context on what allowed Keysight to achieve this.

Answer

CFO Neil Dougherty indicated that Wireline is positioned for significant growth due to AI investment. Wireless is expected to grow in line with the 4%-6% commercial communications target. EISG is also expected to be in the 4%-6% range, with strength in semi and general electronics offsetting automotive questions. Regarding tariffs, Neil Dougherty stated that Keysight is trending towards the lower end of the $150 million-$175 million annualized tariff range, with pricing and surcharging mitigations ramping faster than expected, allowing for offset one quarter ahead of schedule. President and CEO Satish Dhanasekaran added that honoring outstanding pre-tariff orders meant forward-looking exposure is now much smaller.

Mark Delaney of Goldman Sachs inquired about Keysight's current view on end-market recovery and sought clarification on the drivers behind the Q4 revenue guidance, given that order growth was strong but the book-to-bill ratio was below one.

Answer

CEO Satish Dhanasekaran confirmed strong momentum in AI and aerospace & defense, with stability in wireless, but noted ongoing challenges in automotive. CFO Neil Dougherty explained that the Q4 revenue outlook was affected by the timing of a large system integration deal that was recognized in Q3, pulling revenue forward and muting the typical sequential growth pattern.

Mark Delaney sought clarification on the $75 million to $100 million tariff exposure, asking if it was a gross or net figure, and followed up on the specific mitigation actions being taken since the company is not repricing existing backlog.

Answer

CFO Neil Dougherty clarified the $75-$100 million is a gross annualized number and that the company expects to fully mitigate these costs by Q1 of the next fiscal year. He explained mitigation involves reducing tariff exposure through supply chain and manufacturing adjustments, and then offsetting remaining costs via forward-looking price increases on new quotes and other cost reductions.

Mark Delaney sought clarification on the $75 million to $100 million tariff exposure, asking if it was a gross or net figure, and inquired about the specific mitigation actions being taken given the decision not to reprice existing backlog.

Answer

CFO Neil Dougherty clarified the $75M-$100M figure is a gross annualized exposure, with the largest impact expected in Q3 before being fully mitigated by the end of the fiscal year. Mitigation strategies include supply chain adjustments and pricing actions on new quotations. CEO Satish Dhanasekaran added that Keysight's agile supply chain allows for operational realignments to further offset costs.

Mark Delaney asked about the drivers for operating expenses, the outlook for OpEx growth in fiscal 2025, and the validity of the 40% incremental margin framework. He also questioned the reasons for the year-over-year decline in gross margin.

Answer

CFO Neil Dougherty explained that Q1 OpEx was muted but will increase sequentially in Q2. He reaffirmed the ~40% incremental margin framework for quarters with over 5% growth. The gross margin decline was attributed primarily to a less favorable product mix compared to the prior year, which benefited from high-margin backlog sales. CEO Satish Dhanasekaran added that CSG margins remain strong at 68%.

An analyst on behalf of Mark Delaney from Goldman Sachs asked if Keysight would consider other large M&A deals while the Spirent acquisition is pending. He also requested details on the company's share buyback plans for fiscal 2025.

Answer

Executive Satish Dhanasekaran stated that the company's focus remains on its organic growth strategy and selective M&A, noting that management bandwidth, not capital, is the current constraint on pursuing more large deals. Executive Neil Dougherty said that post-Spirent closing, the buyback program will continue at least at an anti-dilutive level, balancing cash needs for the transaction with opportunistic repurchases.

Mark Delaney from Goldman Sachs questioned the drivers underpinning Sensata's low single-digit outgrowth expectation in the auto segment for 2026, specifically asking about the tracking of bookings with domestic OEMs in Asia and China.

Answer

CEO Stephan von Schuckmann detailed strengthened Asia teams, including a China President, Jackie, who has successfully won new business with Chinese OEMs in contactors and sensing. He also noted significant business wins in Japan and South Korea, exceeding North American OEM content per vehicle. CFO Andrew Lynch added that overcoming the mix headwind in China, with content parity between local and multinational OEMs, enabled outgrowth in the second half of 2025, a trend expected to continue in 2026 due to normalized regional growth rates.

Mark Delaney asked for more details on the tracking of bookings with domestic OEMs in Asia and China, and how these and other factors support the low single-digit outgrowth expectation for the automotive segment in 2026.

Answer

Stephan von Schuckmann, CEO, highlighted strengthened Asia teams, successful new business wins with Chinese OEMs (contactors, sensing), doubled revenue with a leading Japanese OEM, and content per vehicle in South Korea exceeding North American OEM levels. Andrew Lynch, CFO, added that overcoming the mix headwind in China by achieving content parity with local OEMs enabled outgrowth in H2 2025, and similar regional growth rates are expected in 2026, making underlying content growth the primary driver.

Mark Delaney inquired about Sensata Technologies' ability to outgrow the global automotive market, particularly in Asia, looking ahead to 2026 based on current business wins and customer discussions.

Answer

Stephan von Schuckmann, Sensata Technologies' Chief Executive Officer, confirmed double-digit outgrowth in China, driven by new business wins in contactors and tire burst systems. He expressed confidence in continued modest outgrowth for the overall automotive business into 2026.

Mark Delaney from Goldman Sachs asked for clarification on Sensata's ability to outgrow the global auto market, particularly in Asia and globally, looking ahead to 2026 based on current wins and customer discussions.

Answer

Stephan von Schuckmann, Sensata Technologies' Chief Executive Officer, confirmed double-digit outgrowth in China due to new business wins, including contactors and tire burst systems. He expressed confidence in continued outgrowth into 2026, driven by these wins and ongoing opportunities.

Mark Delaney asked for details on the drivers of EBIT margin expansion in Q2 and Q3, and inquired about the long-term path to achieving 20%+ margins, including the potential impact from end-market mix.

Answer

CEO Stephan von Schuckmann attributed margin improvement to operational excellence initiatives, including plant benchmarking and commercial rigor. CFO Andrew Lynch confirmed operational productivity is the primary driver, noted the company is comfortable with 19% margins in the near term, and explained that strength in Industrial is currently offsetting mix headwinds from HVOR softness.

Mark Delaney inquired about the size and revenue significance of recent business wins with Chinese and Japanese OEMs, and asked for an updated full-year EBIT margin outlook considering tariffs and revenue trends.

Answer

Chief Executive Officer Stephan Von Schuckmann described the recent wins in Asia as "small to medium-sized" but representing important progress. He also affirmed the full-year margin outlook, stating that after a strong 18.6% pre-tariff margin in Q1, the company expects to be at or above 2024's full-year margin, driven by operational excellence initiatives.

Mark Delaney asked new CEO Stephan Von Schuckmann about his priorities for growth and capital allocation, specifically whether growth would be organic or M&A-driven. He also inquired about the company's potential exposure to tariffs on imports from Mexico and Canada.

Answer

Chief Executive Officer Stephan Von Schuckmann stated his immediate focus is on organic growth, seeing opportunities in Asia Pacific by applying his experience to identify and win with future-leading OEMs. Chief Financial Officer Brian Roberts addressed tariffs, noting that while current China tariffs are not material, about 70% of North American manufacturing occurs in Mexico. He explained the company would leverage its global footprint and work with customers to mitigate any potential impact.

Mark Delaney asked for the full EBIT margin impact from the product line exits and the Insights divestiture, and for more specifics on plans to size OpEx for 2025.

Answer

CFO Brian Roberts clarified that the $200 million product exit could yield a roughly 30 basis point margin improvement at full run-rate, but this requires rationalizing operating expenses over time. He noted the Insights business was slightly accretive in the current year due to sale preparation, so its divestiture offers no immediate margin benefit, but avoids significant future investment.

Mark Delaney questioned when Magna's Complete Vehicles segment could return to growth, considering the momentum with new customers like XPENG and GAC, despite the 2026 guidance. He also sought to understand Magna's exposure to autonomy, including contributions from sensors and AV upfitting, and its sustainability.

Answer

CEO Seetarama Swamy Kotagiri noted that new contracts for Complete Vehicles have a different value-add structure compared to past programs, affecting revenue comparisons. He anticipates a slow 2026 due to end-of-production programs but sees a good pipeline and future growth. On autonomy, Swamy reiterated Magna's disciplined focus on assisted drive and applying relevant technology to AVs, expecting good growth in the ADAS segment.

Mark Delaney asked when Magna's complete vehicles segment could return to growth, considering new customer momentum despite 2026 guidance. He also sought to understand Magna's exposure to autonomy, progress in the Power & Vision (P&V) segment, and the sustainability of opportunities like sensors and AV upfitting.

Answer

CEO Seetarama Swamy Kotagiri noted that new OEM contracts for complete vehicles are structured differently (value-add vs. full revenue), impacting reported growth. He acknowledged a slow 2026 due to end-of-production programs but sees a good pipeline and continuing growth, alongside weaker engineering revenue. He reiterated Magna's disciplined focus on assisted drive and leveraging applicable technology for AV, seeing good growth in the ADAS segment.

Mark Delaney asked about Belden's demand trends by end market, including insights into the solutions pipeline and specific vertical performance, and inquired about supply chain resilience, particularly regarding metals, semiconductors, and the company's ability to offset rising input costs in 2026.

Answer

CEO Ashish Chand highlighted a 26% growth in the total solutions pipeline by the end of 2025, noting strong demand in automation (energy, discrete, process) and hospitality, with fiber growth in broadband. He also addressed supply chain de-risking through regional manufacturing and internal surface mount capabilities, expressing confidence in protecting dollar margins by passing on commodity costs. CFO Jeremy Parks added that inflation is a tailwind driving automation demand.

Mark Delaney asked about Belden's demand trends by end market, including order growth in Q4 2025, and the outlook for 2026. He also inquired about supply chain stability, the ability to procure metals, semiconductors, and DRAM, and the company's confidence in offsetting rising input costs like copper inflation in the coming year.

Answer

CEO Ashish Chand highlighted a 26% growth in the total solutions pipeline by the end of 2025, with strong demand in automation (energy, discrete, process) and hospitality, while broadband showed less robust growth but increasing fiber demand. He stated Belden is well-positioned in its supply chain due to regional manufacturing and internal surface mount capabilities. CFO Jeremy Parks and CEO Ashish Chand expressed confidence in passing on input cost increases to protect dollar margins, noting no evidence of inflation impacting end demand and that inflation is actually driving customer interest in automation.

Mark Delaney of Goldman Sachs requested more context on the recently announced hyperscale award, its revenue potential, and its repeatability. He also asked for an update on the solutions sales mix and the sustainability of the company's lower tax rate.

Answer

CEO Ashish Chand described the hyperscale win as a multi-million dollar, multi-year contract for a repeatable energy management solution applicable to other customers. He confirmed progress toward the 20% solutions revenue goal. CFO Jeremy Parks advised that the current 15% tax rate is due to discrete benefits and that a long-term rate of approximately 20% is a more sustainable assumption for modeling future years.

Mark Delaney asked for clarification on Belden's Q1 guidance, questioning if it assumes any pickup in business activity beyond normal seasonality and inquiring about recent order patterns. He also followed up on the feasibility of the $8 EPS target for 2025, considering incremental foreign exchange headwinds.

Answer

CEO Ashish Chand explained that the Q1 guidance prudently incorporates typical seasonality and some short-term market friction, with expectations for improvement after Q1. CFO Jeremy Parks confirmed that the guidance does not require any pickup in activity to be met. Regarding the $8 EPS target, Parks stated that while it's not formal guidance, achieving it would require business conditions to improve throughout the year and smart capital allocation decisions.

Mark Delaney of Goldman Sachs inquired about the current state of inventory destocking in the channel, the feasibility of the company's $8 EPS target for 2025, and the growth prospects for the APAC region, particularly in light of potential stimulus in China.

Answer

CFO Jeremy Parks explained that while inventory at distributors has normalized, the company is still waiting for a significant acceleration in point-of-sale (POS) as end customers work through their own inventory. He reaffirmed the path to the $8 EPS target for 2025, which relies on mid-single-digit organic growth, 30% incremental EBITDA margins, and capital deployment, stating the outlook hasn't changed since the recent Investor Day. CEO Ashish Chand added that the sales funnel in APAC is 'positively inclined' and expects stimulus in China to benefit Belden's business in mass transit, data centers, and power distribution.

Mark Delaney from Goldman Sachs inquired about the expected composition of Aurora's truck fleet in 2026, specifically whether the incremental 200+ trucks would primarily come from Volvo or the International partnership. He also sought more details on the 2027 outlook for line-side integration, including potential risks related to OEM redundant platforms, AUMOVIO's integration readiness, and third-generation hardware availability.

Answer

Co-Founder and CEO Chris Urmson expressed confidence in achieving the 200+ truck objective by year-end 2026, without disclosing Volvo's specific launch timeline. For 2027, he highlighted the Volvo pilot line as a key integration step and affirmed the strong partnership with AUMOVIO for third-generation hardware, with both committed to 2027 startup production, augmented by Roush's infrastructure.

Mark Delaney asked about the expected composition of the incremental trucks needed to reach the 200+ target this year, specifically whether Volvo or the International relationship would contribute more. He also sought more details on the 2027 outlook for line-side integration, inquiring about potential risks of delay given the need for OEM redundant platforms, AUMOVIO's readiness, and the third-generation hardware kit's availability.

Answer

Chris Urmson, Co-Founder and CEO, stated confidence in achieving the 200+ truck objective by year-end through the supply of vehicles, but could not share Volvo's specific launch timeline. Regarding 2027, he highlighted the critical step of Volvo trucks coming off the pilot line as paving the way for line-side production. He emphasized the strong partnership with AUMOVIO for the third-generation hardware, with both companies committed to a 2027 startup production, augmented by Roush's upfitting infrastructure for International LT Series trucks.

Mark Delaney sought an update on Aurora Innovation's progress with Volvo, specifically regarding the number of trucks received by year-end and the timeline for line-side integration. He also asked for more details on how the new partnership with International evolved and how it supports Aurora's driverless route expansion timeframes.

Answer

CFO David Maday explained that Aurora is receiving B and C sample development trucks from Volvo Autonomous Solutions, which require firmware and software updates for full driverless validation. He confirmed the first line-side integration of the Aurora Driver kit at Volvo's New River Valley assembly plant, signifying progress towards high-scale production, but declined to provide specific partner timelines. Regarding International, David Maday stated the partnership was driven by strong customer demand and technical progress, enabling Aurora to deploy driverless trucks (upfitted stock trucks) across the Sunbelt in Q2 2026, reinforcing leadership and meeting volume potential.

Mark Delaney sought an update on Aurora Innovation's progress with Volvo, specifically regarding the plan to have 20 trucks by year-end and the timeframes for line-side integration. He also asked for more details on how the new partnership with International has evolved and how it supports Aurora's driver route timeframes.

Answer

CFO David Maday clarified that Aurora is receiving B and C sample development trucks from Volvo Autonomous Solutions, which are used for commercial loads and development testing, and noted the first line-side integration of the Aurora Driver kit at Volvo's New River Valley plant as a step towards high-scale production, but declined to provide specific Volvo timelines. David Maday explained that the International partnership allows Aurora to upfit stock trucks to meet strong customer demand and deploy driverlessly without an observer in Q2 2026, supporting volume potential and leadership.

Mark Delaney asked for the drivers behind the increased capital raise target and how the expansion of operating conditions would translate into annualized miles per truck by year-end.

Answer

CFO David Maday explained the higher capital need is not due to margin deterioration but reflects a ~4-month shift in the launch timeline and a desire for flexibility to extend their market lead. He projected that unlocking nighttime operations would effectively double a truck's potential daily drive time from ~8 hours to ~16 hours, which would double its mileage capacity from roughly 400-600 miles per day.

Mark Delaney asked about adopting new AI training techniques to reduce costs, the key factors driving the 2026 positive gross margin goal, and for details on workarounds for the recent adverse FMCSA ruling on flashing lights.

Answer

CEO Christopher Urmson stated that new AI research validates Aurora's focus on data quality over quantity. CFO David Maday cited operational efficiency and strong pricing power from a superior product as key to achieving positive gross margin. Regarding the FMCSA ruling, Urmson confirmed it does not impact the launch, as Aurora has compliant operational and technical workarounds, but declined to provide specifics.

Mark Delaney asked for an update on the operational readiness of the supply chain, whether 2025 contract pricing is materializing as expected, and for the current run rate of contra R&D that will convert to revenue post-launch.

Answer

CEO Christopher Urmson confirmed there are no parts constraints for the launch and that partnerships with Fabrinet and Continental are progressing well for future scaling. CFO David Maday stated that contract pricing is generally in line with market rates, which are currently somewhat soft. Maday also disclosed that contra R&D from pilot revenue was just under $1 million in Q3 2024, which provides a baseline for future revenue modeling.

Mark Delaney sought Vertiv's perspective on the evolving cooling product mix and business opportunities, considering discussions about Rubin-based racks potentially not needing chillers and stainless steel chillers displacing CDUs, and the implications for content per megawatt and market share.

Answer

CEO Giordano Albertazzi affirmed that technology evolution is favorable for content per megawatt. He explained that while some GPUs can run at higher temperatures, heat rejection will always be needed, and data centers often require hybrid cooling for various loads. He highlighted Vertiv's 'trimmed cooler' optimized for high temperatures with flexibility for lower ones, maximizing free cooling. He also stated that CDUs, in various forms, are a long-term element of the thermal chain, and Vertiv's comprehensive portfolio positions it well to manage this complexity.

Mark Delaney sought Vertiv's perspective on the evolving cooling product mix and business opportunity, referencing discussions about racks not needing chillers and stainless steel chillers displacing CDUs. He asked how these trends might impact Vertiv's content per megawatt and market share.

Answer

CEO Giordano Albertazzi stated that technology evolution is favorable for content, noting that while some GPUs can run at higher temperatures, heat rejection remains necessary. He emphasized the trend towards hybrid cooling and thermal chain infrastructure, which complicates the system but benefits Vertiv's comprehensive portfolio. He also affirmed that CDUs, in various forms, are expected to remain a long-term element of the thermal chain.

Mark Delaney inquired about Vertiv's backlog phasing, noting its typical 12-18 month duration, and asked if this implies that large, multi-year data center announcements are not yet fully booked by Vertiv, and if this underpins the company's healthy pipeline comments.

Answer

Giordano Albertazzi, CEO of Vertiv, clarified that the backlog's phasing (distribution over time) is consistent with a year ago, indicating it hasn't been overstretched. He confirmed that Vertiv's backlog strictly includes legally binding Purchase Orders (POs), which align with the speed of deployment. He explained that while Vertiv is involved in many large announced projects, orders flow in as these projects mature and are ready for phased deployment, contributing to the healthy pipeline.

Mark Delaney asked about the typical phasing of Vertiv's backlog (12-18 months) and whether this implies that recent large data center announcements, often spanning many years, have not yet been fully booked, and if this underpins the healthy pipeline comments.

Answer

CEO Giordano Albertazzi confirmed that the backlog phasing remains consistent, indicating no overstretching, and that the $9.5 billion backlog reflects the industry's deployment speed. He clarified that while Vertiv expects to be involved in many large projects, orders flow in phases as projects mature and are ready for deployment, which contributes to the strong pipeline visibility.

Mark Delaney from Goldman Sachs inquired about capital allocation priorities for the significant free cash flow being generated, particularly asking if M&A will become a more regular part of the strategy.

Answer

CEO Giordano Albertazzi affirmed that M&A is an important component of Vertiv's value creation model and capital allocation strategy. He highlighted that the company has a strong process and an active pipeline, and while not predicting a specific deal, he stated Vertiv has the means and credibility to act on the right opportunities.

Mark Delaney from Goldman Sachs Group, Inc. inquired about capital allocation priorities for free cash flow beyond the Great Lakes acquisition and whether M&A would become a more regular part of the strategy.

Answer

CEO Giordano Albertazzi affirmed that M&A is a key element of Vertiv's value creation model and capital allocation strategy. He mentioned the company has a robust process and an active pipeline, and that they will act decisively on the right opportunities, highlighting that Vertiv has the means and credibility to do so.

Mark Delaney asked for details on the expected shape of revenue growth throughout 2025, questioning if supply chain factors like NVIDIA's Blackwell readiness were gating growth in the first half, and if there were any changes to delivery schedules.

Answer

CFO David Fallon stated that Vertiv expects sequential increases in revenue and profit each quarter, with a cadence similar to 2024. CEO Giordano Albertazzi added that the supply chain is 'well supporting' the company's growth plans and that they are not seeing constraints that would alter their outlook.

Mark Delaney of Goldman Sachs Group, Inc. requested detail on order growth between products and services and asked how the industry's shift to liquid cooling is specifically affecting the services business revenue and bookings.

Answer

CEO Giordano Albertazzi expressed satisfaction with the order trajectory for services, stating it reinforces Vertiv's value proposition. He highlighted that the shift to liquid cooling is increasing demand for Vertiv's unique installation, commissioning, and lifecycle services, which in turn reinforces the product value proposition. The company is actively training engineers to meet this growing demand.

Mark Delaney asked about the M&A outlook for the current year, specifically if the company expects to maintain its target of $2 billion-$4 billion in acquired revenue, considering the opportunistic capital allocation strategy.

Answer

Bryan DeBoer, President and CEO, confirmed that $2 billion-$4 billion in acquired revenue is what they are currently seeing for the year. He noted that the actual amount would depend on the company's stock price relative to acquisition pricing, mentioning recent deals in Beverly Hills and Canada.

Mark Delaney inquired about the M&A outlook for 2026, specifically if Lithia & Driveway expects to maintain its target of $2 billion-$4 billion in acquired revenue, given the opportunistic capital allocation strategy.

Answer

Bryan DeBoer, President and CEO, confirmed that the $2 billion-$4 billion target for acquired revenue is what they are currently observing for 2026. He noted that the market is static, and the company is finding deals, with the ultimate volume of acquisitions depending on the balance between stock price valuation and acquisition prices.

Mark Delaney asked about the outlook for BorgWarner's business with China domestic auto OEMs, considering softening local sales but increasing international exports. He also followed up on M&A opportunities, specifically if the data center market or adjacent areas might be targets for augmenting content or capabilities.

Answer

CEO Joseph F. Fadool stated that China represents about 20% of BorgWarner's business, with 70% tied to domestics. He noted that while the local market has slowed, Chinese exports hit a new high of over 7 million last year, which is a strength for BorgWarner, especially with its electrification business. He mentioned discussions with Chinese OEMs about localization outside China. Regarding M&A, Joseph F. Fadool emphasized leveraging BorgWarner's core competence, near-term accretion, and fair pricing, highlighting the turbine generator system as a strong example of organic growth from the current portfolio, rather than indicating specific M&A targets in the data center space.

Mark Delaney inquired about BorgWarner's business outlook with China domestic auto OEMs, considering softening local sales but increasing exports, and the net impact on BorgWarner. He also asked if M&A could augment content or explore adjacent areas within the broader data center space.

Answer

Joseph F. Fadool (CEO, BorgWarner) stated China represents 20% of business, with 70% with domestics, and noted record exports (over 7 million last year) as a strength, with discussions for localization outside China. Regarding M&A, he reiterated pride in 65% content control for the turbine generator system and emphasized disciplined M&A criteria (core competence, industrial logic, near-term accretion, fair price), highlighting organic growth potential.

Mark Delaney inquired about the company's ability to drive revenue growth over market in the medium term using both foundational and eProducts, and asked about potential risks to the China business from the geopolitical and tariff environment.

Answer

CEO Joseph Fadool stated that hybrid vehicles are a key growth driver as they pull from both foundational and e-product portfolios, offering high content per vehicle. Regarding China, he noted that business trends remain positive, supported by eProduct growth. He cited BorgWarner's competitive advantages in technology, long-standing customer relationships with domestic OEMs, and speed-to-market as key mitigants to competitive and geopolitical pressures, viewing any tariff impacts as manageable.

Mark Delaney asked for the reason behind the reduction in the full-year 'growth over market' outlook. He also inquired whether the pace of new business awards from Western OEMs might accelerate after the U.S. election provides more regulatory clarity.

Answer

Executive Frederic Lissalde attributed the lower growth outlook to a modest $200 million reduction in expected sales, split between eProducts and foundational businesses, which he deemed not highly material. He advised focusing on the year-to-date performance of 270 basis points. On the election's impact, he declined to speculate, stating BorgWarner is prepared to support customers regardless of the outcome.

Mark Delaney asked about Ford's cost progress, noting $1.5 billion in 2025 and an expected $1 billion in 2026, and inquired where Ford stands on its previously stated $7 billion cost gap with peers. He also asked about inventory, specifically if the 2026 guidance assumes restocking dealers or shifting to demand, and the sustainability of the extra F-Series production shift into 2027.

Answer

Jim Farley, CEO, confirmed the cost reductions and stated that while the cost gap scenarios are being refreshed, Ford is closing the gap rapidly, with Kumar Galhotra and Doug working on embedding lower costs into next-generation products. Regarding inventory, Jim Farley stated that Ford ended 2025 at the low end of its target range and expects to remain within the 55-65 retail-based supply range in 2026, with F-150s rebuilding in the second half, balancing with demand.

Mark Delaney asked about Ford's cost progress, specifically the $1.5 billion in 2025 and $1 billion expected in 2026, and where the company stands on closing the $7 billion cost gap with peers identified at the 2023 Investor Day. He also inquired about Ford's 2026 inventory strategy, asking if the guidance assumes restocking dealers or shifting to demand, and the sustainability of extra F-Series production into 2027.

Answer

Jim Farley (CEO, Ford Motor Company) confirmed the cost progress, stating they are rapidly closing the cost gap and will refresh scenarios, highlighting embedded lower costs in next-generation products. He also stated that Ford expects to remain within its targeted 55-65 retail-based supply range for 2026, with lower F-150s in H1 and rebuilding in H2, balancing with demand.

Mark Delaney sought clarification on the 'multibillion-dollar opportunity' from new emissions rules, asking if it represents additive EBIT or avoidance of future compliance costs. He also inquired about the underlying profit trends, questioning if Q3 strength was continuing into Q4 given the updated EBIT guidance.

Answer

President and CEO Jim Farley explained that the emissions opportunity involves minimizing credit costs and monetizing mix optimization (powertrains, series, vehicles) to sell what customers want. CFO Sherry House added that purchase obligations of about $2.5 billion may go away, with 40% already reduced due to ZEV-related credit changes. Sherry House clarified that the underlying business was performing exceptionally well, tracking at the high end of original guidance ($7 billion-$8.5 billion), and would have guided $8 billion+ if not for Novelis, indicating progress from material cost improvements, strong credit business, and solid pricing and volume.

Mark Delaney asked if the multibillion-dollar opportunity from new emissions rules is still a valid metric for investors, clarifying if it's additive to EBIT or about avoiding future compliance costs, and sought more color on core business profit trends, reconciling Q3 strength with the Q4 outlook given updated guidance.

Answer

Jim Farley, President and CEO, explained that the new emissions regime would minimize the cost of credits and allow for monetization through powertrain and series mix optimization. Sherry House, CFO, added that purchase obligations of about $2.5 billion, 40% lower than the start of the year due to ZEV-related credit changes, may largely go away. House clarified that the underlying business was performing exceptionally well, tracking at the high end of original guidance, and the updated EBIT guidance reflects the Novelis impact offset by tariff improvements, material cost improvements, strong credit business, and solid pricing/volume.

Mark Delaney asked how Ford is balancing the opportunity from relaxed U.S. emissions policies with the need to remain competitive in EV technology against Chinese OEMs. He also inquired about Ford's current strategy for Level 3 and Level 4 autonomous driving technology.

Answer

CEO James Farley explained that Ford sees a multi-billion dollar opportunity from shifting its vehicle mix while competing with Chinese EVs through radical re-engineering of its next-gen platform and leveraging its LFP battery production. On autonomy, Farley noted progress on a high-speed L3 system for retail customers and sees the L4 opportunity primarily on the service side, with Ford Pro potentially managing and maintaining autonomous fleets.

Mark Delaney inquired about the linearity of the $1.5B net tariff impact this year and Ford's ability to mitigate it long-term. He also asked for an update on Ford Pro's subscriber growth and its software EBIT target.

Answer

CFO Sherry House stated there is no specific linearity to the tariff impact as offsets will be managed in real-time. President of Ford Blue and Model e, Andrew Frick, reported Ford Pro's paid subscriptions grew 20% to 625,000, with growth across all business sizes, and they are on track to increase software's EBIT contribution. CEO James Farley added that competitor pricing pressure may ease due to tariffs.

Mark Delaney asked about the puts and takes for the Ford Pro business in 2025 and the company's confidence in growing its EBIT long-term. He also inquired about the potential cost impact if 25% tariffs were sustained.

Answer

CFO Sherry House noted some pricing softness in fleets and a slight margin headwind from a rising EV mix in Pro. CEO Jim Farley expressed optimism based on a fresh product lineup and the growth of high-margin services, which made up 13% of Pro's Q4 EBIT with a target of 20%. On tariffs, Farley stated a short-term disruption is manageable, but a sustained tariff would be 'devastating' and require major strategic shifts, questioning the policy's fairness compared to other importers.

Mark Delaney inquired about the Q3 moderation in Ford Pro's EBIT margin and confidence in its long-term targets. He also asked about the expected 2025 EBIT improvement for Model e, given cost actions and risks from European CO2 rules and EV pricing.

Answer

CFO John Lawler attributed the Ford Pro margin seasonality to plant shutdowns and a drop-off in rental business, affirming confidence in the segment's strength. CEO Jim Farley highlighted that scaling new EVs in Europe, ongoing cost reductions on Gen 1 vehicles, and maximizing IRA production tax credits are key levers for improving Model e profitability, despite significant industry-wide pricing pressures.

Mark Delaney asked for an update on the shipment trajectory, specifically how the first half of fiscal year 2026 compares to previous expectations of a more muted period followed by a second-half acceleration. He also sought clarification on the near-term revenue and margin implications of the Fox Robotics acquisition, and its longer-term strategic meaning for Symbotic.

Answer

CFO Izzy Martins confirmed that the less pronounced sequential improvement in the first half of fiscal year 2026 is unfolding as anticipated, with Q2 and Q3 growth aligning more closely. CEO Rick Cohen stated there are no immediate revenue implications from the Fox acquisition. He highlighted Fox's 25 customers, some of whom are new to Symbotic, and sees potential in dock automation as a separate market, leveraging Symbotic's software and technology.

Mark Delaney asked for an update on the shipment trajectory, specifically addressing the previously discussed muted first half and accelerated second half. He also sought to understand the near-term and long-term implications of the Fox Robotics acquisition for revenue and margins.

Answer

CFO Izzy Martins confirmed the muted sequential improvement in the first half, aligning with previous expectations, and noted that Q2 and Q3 growth are more aligned, with a pickup expected in Q4. CEO Rick Cohen stated that it's too early to quantify revenue implications from the Fox acquisition but highlighted its potential to broaden the customer base beyond current Symbotic clients and introduce dock automation as a standalone offering.

Mark Delaney asked about the progress at GreenBox in attracting new customers, what new customers would need to see to commit, and the implications of SoftBank's capital raising efforts on GreenBox funding and deployment pace.

Answer

Rick Cohen (CEO, Symbotic) stated that the first GreenBox site in Atlanta will go live soon, with customer announcements expected within 90-180 days, noting significant interest due to current real estate shortages. He mentioned discussions for various GreenBox versions, including 3PL services. He assured that funding for GreenBox is secure through an "ironclad" agreement with SoftBank and Symbotic's own cash reserves.

Mark Delaney asked for an update on GreenBox's progress, specifically regarding finding new customers for its sites, given the new CEO and storage structure. He also inquired about the implications of SoftBank's broader capital raising efforts on GreenBox's funding and the pace of its deployments.

Answer

CEO Rick Cohen stated that the Atlanta GreenBox site would be the first to go live, with significant interest but no customer announcements yet, and ongoing discussions about space and services. He assured that the agreement with SoftBank for funding is ironclad, and Symbotic has sufficient cash for its part, so funding will not be an issue for GreenBox.

Mark Delaney of Goldman Sachs asked for the specific timing of the new storage structure's rollout to customers and whether most of the existing backlog would be converted to it. He also sought clarification on whether new system starts would pause until the new structure is ready and requested an update on the GreenBox deployment timeline against its original six-year target.

Answer

CFO Carol Hibbard clarified that all five new starts in Q3 were for the next-gen structure, with the first installation expected in mid-fiscal 2026. She stated new starts will not go to zero but did slow in Q3 as customers awaited the new design. Regarding GreenBox, she acknowledged slower-than-planned starts but expects progress to accelerate with the new CEO and sales team in place.

Mark Delaney of Goldman Sachs inquired about the potential for bringing in new customers for both core Symbotic and GreenBox, and whether the tariff landscape has impacted demand. He also asked about the likelihood of announcing a material new customer this year and questioned the drivers of the strong Q2 free cash flow.

Answer

CEO Rick Cohen stated that incoming customer interest is increasing, driven by concerns over labor shortages and inflation, and that they do expect to announce material new customers this year. CFO Carol Hibbard explained that the strong free cash flow was driven by the timing of receipts from the 10 new system starts during the quarter, as contracts are structured for early cash flow. She expects the cash position to be stable through year-end.

Mark Delaney asked if the target of adding one to two new customers per year is the right framework for fiscal '25 and if the sales force needs expansion. He also requested details on the Walmex deal's backlog contribution and pricing structure.

Answer

CFO Carol Hibbard confirmed the 1-2 new customers per year framework remains appropriate, with Walmex being the first for FY25. CEO Richard Cohen affirmed that they are expanding the sales force. Hibbard added that the Walmex deal adds approximately $400 million to the backlog for two large greenfield sites and is a new contract, separate from the existing Walmart U.S. agreement.

Mark Delaney from Goldman Sachs asked for an update on Lear's Thermal Comfort Solutions (TCS) business, specifically whether it is still on track for the $1 billion revenue and 10% EBIT margin target by 2027. He also sought clarification on the progress made against the previously stated $3 billion Seating conquest opportunity.

Answer

Jason Cardew, Senior Vice President and CFO, confirmed that the $1 billion revenue and 10% margin targets for TCS remain, but the timing is being pushed out slightly due to lower EV demand and program delays. Ray Scott, Lear President and CEO, expressed confidence in TCS, highlighting 33 awards, the innovation center, and Lear's unique ability to offer full modular assembly. Jason Cardew added that $800 million in net conquest awards were secured in 2025, with a $1.5 billion Seating conquest pipeline for 2026, keeping Lear on track for its 29% market share goal.

Mark Delaney from Goldman Sachs asked for an update on Thermal Comfort Systems (TCS) revenue, specifically if it was still tracking to the $1 billion 2027 target with a 10% EBIT margin.

Answer

Jason Cardew, Senior Vice President and CFO, and Ray Scott, Lear President and CEO, confirmed that the $1 billion revenue and 10% margin targets for TCS remain in place, but the timing is being pushed out due to lower demand for EV platforms and program delays. They highlighted Lear's unique position as the only supplier capable of producing full modular thermal comfort assemblies, with 33 awards secured and an innovation center aiding customer engagement. Mark Delaney then followed up on the conquest business, asking for context on the $3 billion seating conquest opportunity previously discussed, how much has been won, and what remains available. Jason Cardew stated that $800 million in net conquest awards (Seating and E-Systems) were secured in 2025, with a $1.5 billion pipeline for Seating conquest opportunities in 2026, keeping Lear on track for its 29% market share goal. Ray Scott added that the pipeline is rich, with selective and strategic investments.

Mark Delaney from Goldman Sachs questioned the sales outlook, pointing out that despite a stable industry environment, Lear's guidance includes a significant headwind from volume, mix, and wind-downs. He asked for the specific drivers behind this incremental headwind. He also requested the expected annual revenue from the new conquest wiring award with a global EV OEM once it fully ramps up.

Answer

CFO Jason Cardew explained the cautious outlook is due to a self-imposed 2% discount to customer schedules, uncertainty around tariff impacts on EU imports, and specific program headwinds from the Audi Q5 changeover and volume reductions on the JLR Range Rover and Jeep Wagoneer. He stated the new EV wiring conquest award is expected to generate approximately $50 million in annual revenue, starting late 2025 and fully ramping in 2026.

Mark Delaney of Goldman Sachs asked when Lear expects to return to its targeted growth-over-market levels, given the headwinds in 2025. He also requested more detail on the company's exposure to potential tariff increases on imports from Mexico, Canada, and China.

Answer

CFO Jason Cardew stated that while 2025 growth will be weak, 2026 is expected to be a strong growth year, with significant conquest wins launching in the 2028-2030 timeframe. CEO Raymond Scott characterized tariffs as an industry-wide issue requiring a holistic solution. Cardew provided specifics on exposure, noting $2.9 billion in imports from Mexico to the U.S., with much smaller amounts from Canada and China.

Mark Delaney from Goldman Sachs requested insight into the growth over market expectations for Seating and E-Systems for the next few years, considering sourcing headwinds and China momentum. He also sought clarification on the expected 2025 backlog reduction.

Answer

CFO Jason Cardew expressed long-term confidence in achieving the company's growth over market targets of 4% in Seating and 6% in E-Systems, supported by a strong conquest pipeline, but stated it was too early to provide a specific 2025 forecast. He clarified his earlier comment, stating that the initial $800 million backlog for 2025 is expected to see a 'not insignificant' reduction due to delayed launches and lower volume assumptions for key programs like the RAM Charger and certain EV platforms.

Mark Delaney asked if Flex is already seeing material upside specifically from the Amazon warrant deal reached in calendar 2025, and when it might become more meaningfully additive to the business. In a follow-up, he questioned the strong Reliability segment margins (over 7%), asking if this performance was episodic or indicative of the business segment's long-term potential and mix.

Answer

Kevin Krumm (CFO, Flex) stated that the Amazon warrants were not expected to be materially incremental to FY 2026, with upside and additional revenue anticipated to scale over time. Revathi Advaithi (CEO, Flex) added that growth with AWS is strong and proceeding as expected. Regarding Reliability margins, Kevin Krumm attributed the strong Q3 performance to underlying mix impacts from continued growth in power, year-on-year improvements in Core Industrial, and exposure to secular AI trends, expecting these trends to continue into Q4.

Mark Delaney inquired whether Flex is already seeing material upside from the Amazon warrant deal reached in calendar 2025, and if not, when it might become more additive to the business. He also asked if the strong Reliability segment margins (over 7%) were due to episodic factors or indicative of long-term potential and mix.

Answer

Kevin Krumm (CFO, Flex) stated that the Amazon warrants are not incremental nor expected to be materially impactful for FY 2026, with upside anticipated as the program scales over time. Revathi Advaithi (CEO, Flex) added that growth with AWS is strong and proceeding as expected, projected to continue for several years. Kevin explained that the strong Reliability margins were due to underlying mix impacts from continued power growth, year-on-year improvements in core industrial, and strong performance in non-data center related end markets with AI exposure, expecting these trends to continue.

Mark Delaney sought to understand Flex's capacity and ability to support the data center opportunity, asking if any supply constraints are being encountered given the growth. He also questioned whether meaningful increases in CapEx levels would be necessary to support long-term growth in that business. For his second question, Mr. Delaney asked about Flex's internal operations (Flexserve), specifically how AI and automation are being utilized, referencing a pilot with Nvidia, and what to expect for Flex's own operating and logistics in the future.

Answer

CEO Revathi Advaithi expressed confidence in Flex's capacity in EMEA (citing a new asset acquisition in Poland) and North America (investments in Guadalajara for compute, Jet Cool acquisition for cooling, new Dallas facilities, and expanded Fontana/Columbia facilities for power). She anticipates meaningful CapEx deployment and OpEx (R&D and support) shifts towards these businesses over the next 2-5 years, noting that cash flow and operating margins are improving despite these investments. Regarding internal operations, Ms. Advaithi clarified that the Nvidia announcement is focused on deploying ready-to-use modular data center infrastructure for customers to reduce lead times. Internally, she highlighted significant ongoing work in Flex's factories to deploy AI and robotics, expecting these tools to accelerate productivity and efficiency across hardware, software, planning, scheduling, and back-office functions.

Mark Delaney asked about Flex's capacity and ability to support the data center opportunity, potential supply constraints, and whether meaningful CapEx increases would be needed long-term. He also inquired about Flex's internal use of AI and robotics for operating and logistics efficiency, referencing a pilot with Nvidia.

Answer

CEO Revathi Advaithi detailed significant investments in EMEA, North America (Guadalajara, U.S. facilities for cooling and power), and acknowledged the need for more CapEx and OpEx for future data center growth, while noting improving cash flow and operating margins. She clarified the Nvidia partnership is for deploying modular data center infrastructure, not internal factory AI, but expressed excitement for future internal AI/robotics deployment to drive productivity and efficiency across operations.

Mark Delaney inquired about the evolution of the data center products market, asking if hyperscalers doing more in-house design for components like cooling is a long-term trend and how Flex fits into that model. He also questioned why the full-year EPS guidance was raised by only half of the Q1 earnings beat.

Answer

CEO Revathi Advaithi positioned hyperscaler in-house design as a positive validation of the market, stating Flex is equipped to partner through advanced manufacturing, its own IP, or a fully integrated solution. CFO Kevin Krumm attributed the modest full-year EPS guidance raise to a strong but single quarter's outperformance, tougher year-over-year comparisons in the second half, planned investments, and a slightly higher interest expense outlook.

Mark Delaney questioned how potential tariffs, which are excluded from guidance, could affect the 6% operating margin target for fiscal 2026 and whether tariffs were causing any knock-on weakness in end-market demand.

Answer

CFO Kevin Krumm explained that since tariffs are passed through at near-zero margin, they would create a basis point drag on the operating margin percentage but would not impact operating profit dollars. CEO Revathi Advaithi stated they are not seeing significant end-demand weakness outside of some tariff-related disruptions in automotive, and the current guidance reflects this view.

Mark Delaney inquired about the future pace of Flex's cloud business growth, asking if factors like NVIDIA's Blackwell readiness or new AI training methods have altered customer build-out plans. He also asked for more detail on the drivers behind achieving a 6% operating margin ahead of schedule, questioning the split between business mix and operational efficiency, and the potential to sustain this level in fiscal 2026.

Answer

CEO Revathi Advaithi confirmed that the 40%+ data center growth is expected to continue next quarter, with a long-term CAGR target of 20%, citing historical digestion cycles. She stated that recent industry "noise" hasn't changed customer build-out plans and that lower-cost AI is a net positive. Regarding margins, Advaithi attributed the success to a consistent strategy of improving both mix and efficiency across all units but declined to provide a specific breakdown or update the fiscal 2026 outlook, promising more details in a few months.

Mark Delaney asked about Aptiv's visibility into OEM production schedules, particularly the anticipated pickup in Q2 following a slower Q1, and the factors influencing the timing shift of bookings from 2025 into 2026.

Answer

CEO Kevin Clark confirmed that current OEM schedules support a weak Q1 with global vehicle production down approximately 4%, including weakness in China. He indicated that forecasts show strengthening into Q2, Q3, and Q4, closely aligning with Aptiv's 2026 vehicle production outlook. Regarding bookings, Kevin Clark stated that win rates remain strong, and the shifted programs in North America and Europe are well-positioned for future awards. He attributed these timing shifts to broader market dynamics, such as trade policies, tariffs, supply chain tightness, and specific OEM issues, which divert procurement focus from new awards to managing immediate challenges.

Mark Delaney asked about Aptiv's visibility into OEM schedules and the expected pickup in production starting in Q2, given that Q1 growth is projected to be slower than the full year.

Answer

Kevin Clark, Aptiv's CEO, confirmed that Q1 schedules support a relatively weak year-over-year market, with vehicle production down roughly 4% and weakness in China. He stated that forecasts from customers indicate continued strengthening into Q2, Q3, and Q4, closely mirroring the 2026 vehicle production outlook. Delaney also inquired about the broader bookings environment, including any commonalities in programs that shifted timing and how win rates are tracking against expectations. Clark noted that win rates remain strong. He attributed the shifting of Q4 programs in North America and Europe to market dynamics such as trade, tariffs, and supply chain issues, which caused procurement organizations to prioritize managing immediate challenges over awarding new business. He expressed confidence that these well-positioned programs would eventually be awarded.

Mark Delaney sought to understand the degree of conservatism in Q4 guidance related to Nexperia and broader trade tensions, noting that the sequential Q4 revenue decline implies about $80 million or more from these factors beyond customer-specific downtime. He also asked about the areas of most momentum for the implied significant pickup in Q4 bookings ($31 billion full-year guidance) and the reasons for potential shifts of some awards into 2026.

Answer

Kevin Clark (Chair and CEO, Aptiv) stated it's impossible to give a precise number for the conservatism related to Nexperia due to broad outcomes, but it's an incremental overlay beyond the $80 million from customer-specific downtime. For Q4 bookings, Mr. Clark mentioned movement into 2026 is purely timing, potentially influenced by trade policy disruptions. He highlighted large Advanced Safety and User Experience (AS&UX) awards timed for Q4, primarily in ADAS, user experience, and SVA opportunities across North America, Europe, and China.

Mark Delaney from Goldman Sachs asked about the company's visibility and confidence in achieving its second-half weighted $31 billion bookings target and inquired about growth in non-automotive markets.

Answer

CEO Kevin P. Clark expressed a high level of confidence in reaching the full-year bookings target, citing a strong funnel despite a longer finalization process with customers. He added that non-automotive sectors like aerospace and defense are expected to deliver solid double-digit growth in the back half of the year, becoming Aptiv's fastest-growing market.

Mark Delaney asked for details on the 4% auto production decline assumed for Q2, questioning how much was based on actual customer schedule changes versus Aptiv's own expectations. He also inquired about the drivers of the strong Q1 EBIT margin and the reasons for the guided sequential margin decline in Q2.

Answer

CEO Kevin P. Clark explained the Q2 forecast is based on customer schedules, which have not seen significant swings and are largely in line with prior expectations. CFO Varun Laroyia attributed the strong Q1 margin to excellent operational execution, cost savings, and volume flow-through. He noted the Q2 margin is expected to be impacted by FX headwinds, particularly from Mexican peso hedges that were a tailwind in the prior year.

Mark Delaney inquired about the 2025 pricing negotiation environment with OEMs and asked how a major EV OEM's plan to standardize low-voltage connectors might impact Aptiv's business.

Answer

CEO Kevin P. Clark described pricing discussions as more collaborative, with a joint focus on engineered-in cost savings through full-system solutions. Regarding the connector standard, he stated that Aptiv is actively working with that customer on cost reduction and standardization, which has historically led to more content and revenue opportunities.

Mark Delaney sought a detailed explanation of the gross margin bridge from 2025 to the 2026 guidance, which appears relatively flat, asking for specific puts and takes including opportunities from tariff recoveries and Vox integration, alongside challenges like DRAM. He also questioned Gentex's expectations for the China market in 2026 and its strategy for selling to Chinese OEMs as they expand globally, particularly into Europe.

Answer

Steve Downing, President and CEO, indicated that the exit rate from the last six months of 2025 serves as the base for 2026. Key headwinds include customer pricing challenges and significant commodity pricing increases (precious metals like silver, gold, ruthenium, and copper), along with a full year of higher tariff rates, which together represent an estimated $45M-$50M headwind. Regarding China, Downing expects continued headwinds for exports due to high tariffs making the business model unsustainable. For Chinese OEMs expanding globally, he differentiated between cars produced in China and exported (difficult business model) versus those produced domestically in other markets (better competitive chance), noting that most have worked with Gentex previously and include them on supplier lists for new footprints.

Mark Delaney asked for a detailed bridge from Gentex's 2025 gross margin to the 2026 guidance, inquiring about the puts and takes, including opportunities for tariff recoveries and Vox integration synergies, balanced against challenges like DRAM costs. He also sought clarification on expectations for the China market and Gentex's strategy to sell to Chinese OEMs expanding globally, particularly into Europe.

Answer

Steve Downing, President and CEO, indicated that the exit rate from the last six months of 2025 serves as the base for 2026, with expected improvements in supplier pricing. He identified commodity pricing (precious metals, copper) and a full year of higher tariff rates as significant headwinds, totaling $45-$50 million. For China, he expects continued headwinds for exports due to high tariffs. He noted that selling to Chinese OEMs depends on whether cars are produced in China (difficult) or in other regions (better opportunity), confirming that most Chinese OEMs have worked with Gentex previously and include them on supplier lists for new footprints.

Mark Delaney asked about Gentex's strategy to regain growth in the European market amidst content challenges and decontenting, particularly within the C, D, and E segments, and whether growth is contingent on market recovery or new features. He also inquired about the breadth of decontenting across European OEMs and the potential risk of similar cost challenges and tariffs impacting Asia or the U.S. markets.

Answer

President and CEO Steve Downing stated that new technologies like in-cabin monitoring, driver monitoring, visors, and large area devices, with higher ASPs, are key to outgrowing the market, even in a declining environment. He noted that decontenting is primarily limited to a couple of European OEMs, while the overall impact of trade relations has been more drastic than anticipated. He believes the risk of similar decontenting in Asia or the U.S. depends on where vehicles end up, but noted that primary Asian customers like Hyundai-Kia and Toyota have held up well, offering continued growth opportunities.

Mark Delaney of Goldman Sachs circled back to the content challenges and trim mix issues in Europe, asking what steps Gentex can take to achieve growth over market in those segments, or if it's primarily dependent on market recovery. He also inquired about the breadth of the decontenting challenge across European OEMs and the risk of similar cost challenges or tariffs spreading to Asia or the U.S.

Answer

President and CEO Steve Downing stated that Gentex can achieve growth through new technologies like in-cabin monitoring, driver monitoring, and large area dimmable devices (visors), which have higher average selling prices, even in a declining market. He clarified that decontenting is limited to a couple of European OEMs, although many have been impacted by overall volume and trim level changes. Mr. Downing acknowledged the possibility of challenges spreading but noted that primary Asian customers (Hyundai, Kia, Toyota) have performed well, offering continued growth opportunities.

Mark Delaney asked about Gentex's confidence in fully offsetting import tariff costs with price increases to OEMs and the progress of those negotiations. He also inquired about what the company is seeing in customer production schedules and the underlying reasons for the trim-mix deterioration seen in the first quarter.

Answer

President and CEO Steve Downing expressed confidence in passing through tariff costs, noting that the industry has 'muscle memory' from previous rounds and that OEMs understand suppliers cannot absorb such costs. He stated that customer production schedules in North America and Europe have been stable, with most volatility coming from China. Downing attributed the Q1 trim-mix weakness to broader OEM cost-cutting efforts, evidenced by rising vehicle incentives, which often leads to the removal of content like passenger-side auto-dimming mirrors.

Mark Delaney asked about customer feedback and momentum from CES for new technologies like Large Dimmable Devices, the timeline for new product bookings, and the company's 2025 financial expectations regarding cost downs and pricing needed to reach its 35% gross margin target.

Answer

CTO Neil Boehm reported positive feedback on Large Dimming Devices and wireless power concepts from CES, with development projects for large devices underway. CEO Steve Downing added that they are launching four unique Driver Monitoring Systems. Downing also stated they expect to offset 100-150 bps of customer pricing pressure with supplier cost downs, with the benefit beginning in Q2.

Mark Delaney inquired about the margin outlook for 2026, considering the company's sustained record high EBIT margin, the impact of recent large deals and fast growth, and key puts and takes for incremental margins.

Answer

Craig Lampo (CFO) stated that metals prices are managed through offsets and not expected to significantly impact margins. He explained that Q1 margins are affected by normal seasonal organic sales decreases and the dilutive impact of CCS. He expects normal operating margins and 30% conversion on incremental sales for the rest of 2026, with CCS eventually reaching company average margins.

Mark Delaney inquired about Amphenol's margin outlook for 2026, considering the sustained record-high EBIT margin, recent large acquisitions, and rapid growth. He asked for color on incremental margins and key factors influencing them.

Answer

CFO Craig Lampo stated that metals costs are being managed and are not expected to significantly impact the margin outlook. He explained that Q1 typically sees a slight sequential organic sales decrease due to seasonality, with conversion in the mid-thirties. The primary impact on Q1 margins is from CCS, which has lower operating margins (just under high teens) in Q1 due to its own seasonality, causing a bit over 100 basis points of dilution. He expects normal operating margins and 30% conversion on incremental sales for the rest of 2026, with CCS eventually reaching company average margins.

Mark Delaney inquired about the specific opportunities and drivers behind the better-than-expected strength in the automotive market in Q3, and the outlook for Q4 in this segment.

Answer

CEO Adam Norwitt highlighted strong global performance in automotive, with sequential growth across all regions and double-digit organic growth in Europe. He noted the team's ability to execute on new design wins in EVs, traditional, and hybrid vehicles, expecting a modest sequential decline in Q4 due to normal seasonality.

Mark Delaney asked for more details on the specific opportunities and factors that contributed to Amphenol's better-than-expected strength in the automotive market during Q3, including double-digit organic growth in Europe. He also requested additional color on the company's outlook for the automotive market in Q4.

Answer

CEO Adam Norwitt attributed Amphenol's better-than-expected Q3 automotive performance to strong global execution, including double-digit organic growth in Europe, capitalizing on diverse opportunities. For Q4, he anticipates a modest sequential decline, which is typical, but emphasized Amphenol's strong position in new platforms like EVs, as well as continued growth in traditional and hybrid vehicles.

Mark Delaney of Goldman Sachs asked for more details on the Q2 demand pull-in from Q3 and questioned what provides the confidence to maintain elevated CapEx levels despite a guided moderation in sales.

Answer

President & CEO R. Adam Norwitt characterized the situation as 'out-executing' customer demand rather than a pull-in. He explained that the confidence to invest comes from securing future programs and gaining long-term visibility and commitments from customers, which necessitates upfront capital expenditure to support future growth.

Mark Delaney from Goldman Sachs asked for insight into the breadth of demand within the data center market, questioning if the strength was broad-based or concentrated, especially in light of media reports that some hyperscalers might be slowing investments.

Answer

CEO Adam Norwitt stated that Amphenol's performance has been strong "across the breadth of companies involved in building out AI," including hyperscalers, OEMs, and chip companies. He emphasized that the position is not overly concentrated and that customer feedback indicates a continued need for as many components as Amphenol can supply, which is reflected in the strong Q2 guidance.

Mark Delaney asked about the supply side of the AI ramp, specifically whether Amphenol has encountered any yield or supply chain issues that could constrain its ability to meet the robust demand.

Answer

CEO R. Norwitt emphasized that customers choose Amphenol for both its technology and its execution capabilities, which are rooted in its decentralized, entrepreneurial organization. He stated that this agile structure, proven in dynamic markets like mobile devices, allows the company to manage very challenging and significant AI program ramp-ups effectively. While not always perfect, the company's ability to react in real-time provides customers with confidence.

Mark Delaney inquired about the drivers behind the record EBIT margin, the current margin profile of the recently acquired CIT business, and the outlook for incremental margins.

Answer

CFO Craig Lampo attributed the record margin to strong operational execution on higher sales volume, not a significant contribution from the CIT acquisition, which is still on its integration journey. He reaffirmed the long-term 25% incremental margin target but expressed growing optimism that CIT will eventually reach the company's average profitability.

Mark Delaney asked about the drivers behind the significant step-up in Super Cruise revenue to $426 million in 2026 and other key areas of momentum in the broader OnStar digital services business. He also inquired about GM's strategy to maintain stable China profits in 2026 despite a potentially softening market and increased competition.

Answer

Paul Jacobson, EVP and CFO, attributed Super Cruise revenue growth to the amortization of three years of prepaid services on new vehicle sales and strong renewal rates (low 40% range). He added that OnStar basics provide engagement opportunities for enhanced services and future software-defined vehicle offerings. Mary Barra, Chair and CEO, highlighted GM's new energy vehicle launches (over 50% of sales), China-for-China solutions, disciplined inventory management, improved dealer profitability, and strong Cadillac and Buick brands as key to competing effectively in a softening China market.

Mark Delaney asked about the significant step-up in Super Cruise revenue expected for 2026, its drivers, and other key areas of momentum in the OnStar digital services business. He also questioned General Motors' China market outlook, specifically how similar profits are expected in 2026 despite potential market softening, and what specific GM offsets are in place.

Answer

Paul Jacobson, EVP and CFO, attributed Super Cruise growth to increased sales of equipped vehicles (amortizing prepaid services) and strong renewal rates. Mary Barra, Chair and CEO, cited strong new energy vehicle launches (over 50% of sales), China-for-China solutions, disciplined inventory/incentive management, improved dealer profitability, and strong Cadillac/Buick brands as key offsets for the China market.

Mark Delaney asked about the path for GM North America margins to return to the 8%-10% target, including the feasibility of achieving this without a substantial reduction in tariffs. He also inquired about the status of GM's supply chain for key materials like aluminum, semiconductors, and rare earths, particularly regarding stock visibility and the ability to secure alternative sources.

Answer

Paul Jacobson, GM's Executive Vice President and CFO, outlined levers for margin improvement, including a lower net tariff burden (through agreements or self-help), overcoming warranty expense (with cash outflows stabilizing), and right-sizing EV capacity. Mary Barra, GM's Chair and CEO, emphasized GM's multi-year effort to build supply chain resiliency, including onshore/ally shore sourcing for battery raw materials. She noted minimal impact from Novellus due to alternative sources and ongoing efforts to address potential disruptions from the China chip situation, expressing hope for a resolution.

Mark Delaney asked what needs to happen for GM North America margins to return to 8%-10% and its feasibility without substantial tariff reductions. He also inquired about GM's supply chain status regarding aluminum, semis, and rare earths, including weeks of stock and ability to bring up alternative sources, in light of recent events.

Answer

Paul Jacobson, GM's Executive Vice President and CFO, outlined levers for returning to 8%-10% margins, including a lower net tariff burden (through agreements or self-help), overcoming warranty expense, and right-sizing EV capacity for a more natural demand environment. Mary Barra, GM's Chair and CEO, addressed supply chain resiliency, noting efforts to source raw materials (batteries, rare earths) from North America or allies. She stated minimal impact from Novellus (aluminum) due to alternative sources and ongoing work to mitigate potential disruptions from the China chip situation.

Mark Delaney requested a breakdown of the guided $2 billion in year-over-year EV savings between volume-related factors and other items like material costs. He also asked for more specific baseline assumptions on EV pricing to better model potential impacts from policy changes.

Answer

EVP and CFO Paul Jacobson estimated the $2 billion in EV savings is split roughly 50-50 between scale benefits and other initiatives like cell and vehicle cost reductions. He added that GM assumes fairly consistent EV pricing, noting that some of the current "irrational incentive behavior" in the market could subside depending on future regulations.

Mark Delaney from Goldman Sachs asked if strong sales of the entry-level Equinox EV could impact GM's ability to hit its profit targets. He also inquired about GM's manufacturing flexibility to mitigate potential U.S. import tariffs.

Answer

Chair and CEO Mary Barra stated that profitability is assessed across the entire EV portfolio, not just one SKU, and noted strong interest in current Equinox EV models. Regarding tariffs, she said GM is monitoring the political landscape, will engage with policymakers, and will remain resilient and disciplined to make necessary adjustments to protect profitability.

Mark Delaney inquired about the surround data opportunity, specifically the number of OEMs Mobileye is engaged with and the potential for new awards in 2026. He also asked about the catalyzed interest in Mentee Robotics following its announcement and the importance of data collection for its 2028 commercialization target.

Answer

Nimrod Nehushtan, EVP of Business Development and Strategy, explained that surround data addresses clear OEM pain points, leading to a 'flywheel effect' after two major design wins. He noted increased engagements with multiple OEMs, emphasizing Mobileye's advantages in reliability, safety, and cost-efficiency for high-volume vehicle categories. Regarding Mentee, Mr. Nehushtan reported significant customer reach-outs for on-site pilots and proof of concepts, leveraging Mobileye's trusted relationships in the automotive business. He affirmed that data collection is crucial for meeting the 2028 commercialization timeframe.

Mark Delaney inquired about the number of OEMs engaged with Mobileye for Surround ADAS in 2026 and the potential for new awards, and then asked about Mentee Robotics' ability to catalyze additional customer interest for data gathering in commercial environments to support its 2028 commercialization target.

Answer

Nimrod Nehushtan (EVP of Business Development and Strategy, Mobileye) stated that Surround ADAS addresses clear OEM pain points, and the two major design wins have created a flywheel effect, increasing engagements with multiple OEMs. He emphasized Mobileye's inherent advantages in reliability, safety, advanced functionalities, and cost-efficiency. Regarding Mentee, Nimrod noted significant customer reach-outs for on-site pilots since CES, with OEMs trusting Mobileye's automotive background and seeing a need for labor solutions, which will facilitate crucial data collection for commercialization.

Mark Delaney sought clarification on the Drive opportunity with Lyft and Moran Shemesh, specifically whether the OEM partner is finalized and the timeline to secure it to meet the 2026 startup objective. He also asked about the remaining steps and timing for the Volkswagen ID.Buzz to achieve driver-out status next year.

Answer

Amnon Shashua, CEO and President, stated that while the OEM partner for Lyft is not 100% finalized, there is no uncertainty about who it is, and it looks on track. Nimrod Nehushtan, EVP of Business Development and Strategy, added that Mobileye has been working closely with this OEM for 18 months on prototypes and vehicle integration. Dan Galves, Chief Communications Officer, emphasized that the priority is removing the safety driver to commercialize and scale. For the ID.Buzz, Amnon noted that vehicle readiness and MTBF KPIs are on track, with safety driver removal expected in H1 2026 in one U.S. city, preparing for commercial deployment later in 2026 and early 2027.

Mark Delaney inquired about the Drive opportunity with Lyft and Marubeni, asking if the OEM partner is effectively finalized and the timeframe needed to secure the partner to meet the 2026 start-up objective. He also asked for more details on the VW ID. Buzz Drive program, specifically what needs to happen to remove the safety driver next year and the expected timing.

Answer

Amnon Shashua, CEO and President, stated that while the OEM partner for Lyft is not 100% finalized, it is 'on track and looks good.' Nimrod Nehushtan, EVP of Business Development and Strategy, added that they have been working closely with this OEM for almost 18 months on prototypes and vehicle integration. Dan Galves, Chief Communications Officer, emphasized that removing the safety driver and commercialization are the main priorities. For the VW ID. Buzz, Amnon Shashua outlined milestones including vehicle readiness (weeks/months) and tracking MTBF KPIs, expressing confidence in removing the safety driver in one U.S. city in the first half of 2026 for commercial deployment later in the year or early 2027.

Mark Delaney asked about the development progress for Mobileye Drive to meet its 2026 targets and whether its revenue will become meaningful by 2027. He also questioned why SuperVision and Chauffeur awards are progressing slower than expected.

Answer

CEO Amnon Shashua confirmed that Drive development is on track for a late 2026 launch and will generate meaningful revenue from 2027 onwards. He attributed the slower pace of SuperVision/Chauffeur awards to macro turbulence but noted confidence remains high. Executive Daniel Galves added that two new, significant engagements have started since December.

Mark Delaney of Goldman Sachs asked for an update on the Mobileye Drive robotaxi technology progress and commercial launch timing, and sought clarification on the status of the design win pipeline presented at the Capital Markets Day.

Answer

CEO Amnon Shashua confirmed the robotaxi program with Volkswagen targets a late 2026/2027 launch, with hardware upgrades and testing occurring throughout 2025. Executive Daniel Galves added that commercial milestones are expected in 2025. Regarding the pipeline, EVP Nimrod Nehushtan stated that none of the advanced opportunities discussed at the Capital Markets Day have been lost or negatively impacted.

Mark Delaney asked for an update on customer engagements for advanced solutions like SuperVision and Chauffeur, specifically if any decisions went against Mobileye or were delayed. He also questioned how the company maintained its revenue guidance despite OEM production weakness and inquired about current inventory levels.

Answer

Executive Daniel Galves confirmed that no decisions have been made against Mobileye in the past 90 days and there have been no material delays, noting that OEMs are proceeding with securing components for these systems. CFO Moran Rojansky explained that the inventory issue is now believed to be resolved, with Q3 and Q4 shipments reflecting normalized demand. She added that changes in the mix of OEM customers helped offset some production weakness.

Mark Delaney asked for clarification on TE Connectivity's order trends, both sequentially and year-over-year, and their implications for future revenue by end market, particularly regarding the Q2 revenue guidance versus record Q1 orders, and any changes in order duration.

Answer

CEO Terrence Curtin highlighted record orders over $5 billion, with broad-based double-digit growth even excluding DDN. He noted strengthening orders in Industrial (DDN, Energy, AD&M, ACL recovery) and explained that Transportation orders reflect production patterns, with a typical Q1 to Q2 auto production decline impacting the Q2 guide despite strong overall order momentum.

Mark Delaney asked for clarification on TE Connectivity's order trends, both sequentially and year-over-year, and their implications for future revenue by end market, particularly reconciling the record $5.1 billion orders with the $4.7 billion sequential revenue guidance. He also asked about changes in order duration.

Answer

CEO Terrence Curtin highlighted record orders of over $5 billion, up $1 billion year-over-year and broad-based, with double-digit growth even excluding DDN. He noted strong momentum in Industrial (DDN, energy, AD&M, and recovery in ACL) and transportation orders reflecting production patterns. The sequential revenue guidance reflects typical automotive seasonality, with a 3 million unit production decline from Q1 to Q2, partially offset by double-digit sequential growth in Industrial Solutions.

Mark Delaney asked for a better understanding of demand trends across end markets beyond Digital Data & Devices (DDN), specifically how these trends have evolved over the last 90 days, and any initial outlook for fiscal year 2026.

Answer

CEO Terrence Curtin noted improved order growth year-over-year and sequentially in both segments, indicating a better environment than 90 days prior. In transportation, auto orders were up, with expected stability between regions and content growth of 4%-6%. Commercial transportation remains uneven, with growth in Europe and Asia offset by North American weakness. In the industrial segment, energy and AD&M showed consistent growth, while the factory automation side of ACL improved, offsetting weakness in consumer-related areas. Overall, the industrial segment maintains strong momentum, with transportation showing stability in some markets.

Mark Delaney from Goldman Sachs questioned the sustainability of the current strong demand and asked if any of it could be attributed to customers pre-buying to mitigate potential tariff risks.

Answer

CEO Terrence Curtin stated that the company sees no meaningful impact from customer pull-ins or pre-buying. He affirmed the durability of demand, citing strong orders in Asia for the Transportation segment and continued momentum in AI, Energy, and Aerospace for the Industrial segment. He also noted encouraging signs of order improvement in general industrial end markets.

Mark Delaney inquired about how tariffs are affecting the outlook by end market and what provides confidence that there hasn't been a material pull-in of sales ahead of tariff implementations.

Answer

CEO Terrence Curtin stated that TE did not see any meaningful sales pull-ins, attributing this to normal lead times and available inventory. He detailed a mixed end-market environment, with continued momentum in AI, Energy, and Aerospace, but a more cautious, flat outlook for the ACL business and continued weakness in the Transportation segment.

Mark Delaney inquired about TE Connectivity's order trends, seeking details on end-market performance, order linearity, and how these factors informed the Q2 guidance, particularly regarding AI-related orders.

Answer

CEO Terrence Curtin explained that Q1 orders were stronger than expected, supporting the outlook for sequential growth in Q2. He noted that orders in Asia were accelerating while Europe remained weak. The Industrial segment saw broad growth with a book-to-bill over 1 in all businesses, and even excluding AI, industrial orders grew 10% year-over-year. Curtin also mentioned that AI orders grew nicely and that the automation and control space is showing signs of stabilization.

Mark Delaney of Goldman Sachs asked about the long-term outlook for auto content growth, specifically seeking TE's perspective on Tesla's plan to simplify its low-voltage connector architecture and any potential implications.

Answer

CEO Terrence Curtin stated that while not commenting on specific customers, such architectural changes are exciting opportunities for TE. He explained that evolving vehicle architectures, whether moving to 48-volt systems or zonal computing, often leads to more complex, miniaturized interconnects. This 'electronification' across all powertrains typically increases content opportunities for TE, reinforcing the company's long-term 4-6% content growth outlook.

Mark Delaney asked about potential supply-side constraints for Jabil's data center customers, including power supply issues, and to what extent these have been factored into the 35% AI growth guidance. He also followed up on the possibility of winning a third hyperscale customer, asking for more color on product types and the expected timing of converting this opportunity.

Answer

CEO Mike Dastoor acknowledged that power constraints for data centers are not new and that Jabil's comprehensive solutions, including design, engineering, and liquid cooling across various offerings, are actively addressing heat management. He stated that Jabil is not seeing any major impact of slowdowns and the pipeline remains strong, with no signs of 'AI bubbles.' Regarding a third hyperscaler, Dastoor indicated that discussions are ongoing, but it's premature to discuss specific products or revenue. He emphasized that Jabil's design and engineering architecture is attracting hyperscalers, with discussions often expanding from servers to liquid cooling, silicon photonics, and other data center infrastructure. He confirmed that a third hyperscaler is not yet built into the current guidance numbers.

Mark Delaney with Goldman Sachs asked about potential supply-side constraints for Jabil's data center customers, particularly regarding power supply to data center sites, given Jabil's raised AI growth outlook to 35%. He inquired whether these potential constraints were factored into Jabil's guidance. He also sought more details on the possibility of winning a third hyperscale customer, including the types of products Jabil hopes to sell and the expected timeline for converting this opportunity.

Answer

CEO Mike Dastoor acknowledged that power constraints for data centers are not new, but Jabil has continued to grow exponentially (35% in FY26) by engaging with customers to address heat questions through its design, engineering, and liquid cooling offerings across chips, rack servers, networking switches, and data center infrastructure. He stated that Jabil is not seeing any major impact of slowdowns and has a 'healthy pipeline.' Regarding a third hyperscaler, Mike Dastoor confirmed ongoing discussions but deemed it premature to discuss specific products or revenue. He emphasized that Jabil's design and engineering architecture capabilities, which can start with a server in a rack and expand to liquid cooling, silicon photonics, and other data center infrastructure solutions, are driving these discussions. He reiterated that a third hyperscaler is not yet built into any current guidance numbers.

Mark Delaney inquired about the potential for Q3's strong sales being a result of customer pull-ins due to tariff uncertainty and whether the newly announced U.S. expansion is intended for existing customers or to capture new opportunities.

Answer

CEO Mike Dastoor stated that the Q3 revenue beat was not due to tariff-related pull-ins, as the strength was in U.S.-centric businesses like cloud infrastructure. He clarified that the new U.S. factory investment is designed to support a diversified and expanding base of hyperscaler and other customers, not just existing ones.

Mark Delaney of The Goldman Sachs Group, Inc. focused on the impact of tariffs, asking for details on current customer discussions about shifting sourcing to the U.S. He also sought to clarify what specific tariff assumptions, such as those for Mexico, are embedded in Jabil's fiscal 2025 guidance and if any revenue headwinds from uncertainty are included.

Answer

Chief Executive Officer Mike Dastoor stated that while discussions are happening, it's early days for major sourcing shifts. He reiterated that Jabil has minimal direct exposure to currently known tariffs on goods from China, Canada, and Mexico, with 80-90% of Mexico business being USMCA compliant. Dastoor confirmed the FY25 guidance reflects prudence in cautious end markets like EVs and renewables but does not assume specific impacts from unknown reciprocal tariffs, viewing the overall situation as a net positive opportunity for Jabil.

Mark Delaney sought details on customer responses to potential tariffs, asking if they are actively planning to shift sourcing to the U.S. He also asked what tariff assumptions are embedded in the fiscal 2025 guidance.

Answer

CEO Mike Dastoor stated that while discussions are ongoing, they are not yet seeing large-scale shifts, and Jabil is well-positioned to assist. He clarified that Jabil has minimal direct exposure to currently discussed tariffs on China, Canada, and Mexico (due to USMCA compliance). The FY25 guidance reflects prudence in certain end markets like EVs and renewables but does not assume major demand disruption from potential future reciprocal tariffs, the mechanics of which are still unknown.

Asked about the cost differential between U.S. and Mexico manufacturing in the context of potential tariffs, and questioned the math behind the full-year EPS guidance update relative to the Q1 beat.

Answer

The company acknowledged higher U.S. costs but emphasized that tariffs are a pass-through and its automation capabilities can mitigate labor cost differences for customers considering a move. The full-year guidance reflects a mix of upward revisions in cloud and more cautious outlooks for automotive (EVs) and renewables.

Mark Delaney asked about the cost comparison between U.S. and Mexico manufacturing and whether customers could overcome potential cost increases from reshoring. He also questioned why the full-year EPS guidance was raised by less than the Q1 beat, suggesting a potentially softer outlook for the remainder of the year.

Answer

CEO Mike Dastoor acknowledged that U.S. costs are higher but stated that for Jabil, any tariff-related costs are a pass-through. He emphasized that Jabil's automation and robotics capabilities make it well-positioned to manage such moves. Regarding the guidance, Dastoor explained it reflects a series of "puts and takes," with increased strength in data cloud being offset by a more prudent outlook for the automotive and renewables markets, particularly post-election.

Requested more detail on the two new hyperscaler customer wins, asked about the level of conservatism in the FY25 revenue guidance, and inquired about the impact of pricing on the EBIT margin outlook.

Answer

The new hyperscaler wins are currently specific to optical components, but Jabil sees this as a strategic entry point to demonstrate broader value in areas like liquid cooling. The FY25 guidance is described as conservative, based on booked business and normal seasonality without assuming a major end-market recovery. Management stated there are no major pricing issues impacting the margin outlook; the primary headwind is the 20-30 basis points from carrying surplus factory capacity.

Mark Delaney asked about the potential for gross margin expansion as ChargePoint works through older inventory and transitions to new products, specifically inquiring about the timing and impact of these new products on hardware gross margins.

Answer

CFO Mansi Khetani explained that near-term hardware margin improvements would be driven by product mix, remaining around current levels until existing inventory is sold. She noted that current margins already benefit from Asia manufacturing, with larger improvements expected as existing inventory clears and new products are released in the latter half of the next year, though overall hardware margin depends on the final mix.

Mark Delaney asked about the impact of inventory on gross margin potential, specifically whether new products are expected to drive gross margins higher, and the timing for these new products to become a larger part of the mix.

Answer

CFO Mansi Khetani stated that near-term hardware margin improvements would be driven by product mix, remaining around current levels until existing inventory is sold. She anticipates larger improvements from Asia manufacturing and new products in the latter half of next year, noting overall hardware margin depends on the final mix.

Mark Delaney inquired about the trend of customers sourcing charging hardware from multiple providers in North America and its impact on revenue. He also asked for an update on station utilization rates and what level might trigger new investments.

Answer

CEO Rick Wilmer stated that while large customers express intent to multi-source hardware, their actions still favor ChargePoint due to reliability. He confirmed utilization rates are increasing and are now beginning to 'pull through' new demand, especially from workplace customers. He also noted a trend in the hospitality sector toward establishing brand-wide charging standards.

Mark Delaney asked about demand trends in the project pipeline, the business mix by vertical, the decoupling of hardware and software revenue, permitting challenges, and the hardware mix's impact on future gross margins.

Answer

CEO Rick Wilmer highlighted that demand is driven by improved EV selection and that commercial and fleet segments remain strong. He also confirmed the trend of hardware/software decoupling continues. CFO Mansi Khetani noted the business mix was stable (68% commercial) and that margin improvements were driven by hardware costs and subscription scale, not mix. Wilmer added that permitting challenges are in a 'steady state'.

Mark Delaney sought more detail on management's confidence that the business has troughed and is poised for momentum, and asked for specifics on the expected OpEx savings and their sustainability.

Answer

Executive Richard Wilmer pointed to the growing diversity of EV models as a key market driver. CFO Mansi Khetani added that confidence comes from closing pushed-out deals, large fleet wins, and government-related orders. She confirmed the $38 million annualized OpEx savings from the September restructuring will be fully realized in Q4 and that the company continuously seeks further efficiencies.

Mark Delaney asked for more details on the automotive cost of goods sold (COGS) per vehicle, which came down to about $96,000 in Q3 despite plant downtime, and inquired about the drivers, particularly material costs, and future cost targets for R2. He also asked about Mind Robotics, its function, external financing, and future opportunities.

Answer

Claire McDonough, CFO, confirmed the $96.3 thousand COGS per unit in Q3, noting the impact of fixed cost absorption from downtime. She highlighted R2's ramp and scaling as the primary driver for COGS improvement in 2026, expecting R2 to achieve positive gross profit by the end of 2026. RJ Scaringe, CEO, explained that Mind Robotics is a separate entity, with Rivian as a shareholder, that raised $110 million in seed funding from external sources to develop AI-enabled robotic solutions for efficient manufacturing and industrial applications.

Mark Delaney inquired about the significant reduction in cost of goods sold (COGS) per vehicle to $96,000 in Q3, despite plant downtime, asking for more details on material cost drivers and future cost expectations, especially for R2. He also asked for an update on Mind Robotics, its operations, and external financing.

Answer

CFO Claire McDonough confirmed the $96.3K COGS per unit, noting it was achieved despite fixed cost absorption from downtime. She highlighted R2's ramp and scaling efforts as the primary driver for COGS improvement in 2026, aiming for positive gross profit by the end of 2026. CEO RJ Scaringe explained Mind Robotics is a separate entity, with Rivian as a shareholder, that raised $110 million in seed funding from outside Rivian to develop AI-enabled robotics for manufacturing and industrial applications.

Mark Delaney asked for an explanation of the sequential $22,000 increase in COGS per vehicle and whether this impacts the absolute cost target for R2. He also questioned how average selling prices (ASPs) would trend given the loss of IRA tax credits.

Answer

CFO Claire McDonough attributed the COGS increase primarily to lower production volume and reduced fixed cost absorption ($14k/unit), plus other costs. She stated R2's cost structure benefits from joint sourcing opportunities. CEO RJ Scaringe noted that despite the potential loss of credits, R1 maintains strong market share leadership and expects strong ASPs to persist, while the overall blended ASP will be affected by a higher mix of commercial vans in the second half of the year.

Mark Delaney asked whether the reduction in the full-year delivery outlook was driven by weaker current orders or an expectation of future market deterioration due to tariffs and economic factors. He also inquired if the strong Q1 regulatory credit revenue implied potential upside to the full-year outlook of approximately $300 million.

Answer

CEO Robert Scaringe attributed the guidance change to a challenging consumer demand backdrop, noting that while R1 is performing well in its segment, consumers are generally more price-sensitive, which limits the market size for high-ASP vehicles. CFO Claire McDonough stated that the company still expects regulatory credit revenue to be "in and around the $300 million area" for the full year.

Mark Delaney asked about the monetization strategy for the Rivian Autonomy Platform, particularly for Level 3 features, and the gross profit implications of the approximately $2 billion in deferred revenue from the Volkswagen joint venture.

Answer

CEO RJ Scaringe stated that while there is a near-term opportunity to charge for hands-free, eyes-off features, the long-term pricing model will depend on the competitive landscape, but it will create economic value regardless. CFO Claire McDonough confirmed the deferred JV revenue will be recognized as pure profit over the next four years, though it will be back-end weighted and tied to development milestones rather than straight-lined.

Mark Delaney asked about Rivian's current production run-rate to contextualize the Enduro motor supply constraint and questioned the reason for the increase in the 2024 regulatory credit forecast to $300 million.

Answer

COO Javier Varela described the supply constraint as a short-term issue that is being urgently addressed, with new capacity ramping up and an expected resolution in the 'very next weeks.' CFO Claire McDonough attributed the higher regulatory credit forecast to an increase in the underlying value of credits sold and the team's success in maximizing opportunities in the complex state-by-state market.

Mark Delaney asked for context on Visteon's consolidated growth trajectory in the coming years, considering share gains, booking strength, AI opportunities, and headwinds like BMS and customer mix, specifically asking how the company is tracking against its $4.15 billion revenue target for 2027. He also inquired about the profit implications for the BMS product area, questioning its profitability given anticipated lower sales in 2026 and 2027.

Answer

CEO Sachin Lawande deferred specific 2027 revenue comments due to volume uncertainty but highlighted progress on Toyota, Honda two-wheeler, and commercial vehicle launches (Traton, Volvo Trucks) in 2027, alongside expected China growth and lapping BMS headwinds. CFO Jerome Rouquet confirmed that BMS, representing about 5% of sales, maintains similar margins to other product lines and can remain profitable even with lower sales in 2026 and 2027.

Mark Delaney of Goldman Sachs asked about Visteon's potential to further penetrate its relationship with Toyota and whether this success could open doors with other Japanese OEMs. He also requested a breakdown of the drivers behind the improved full-year EBITDA margin guidance.

Answer

President and CEO Sachin Lawande confirmed significant progress with Toyota on high-profile vehicles like the Camry and Land Cruiser, primarily with digital clusters, and sees further opportunity. He emphasized the current focus is on executing these wins successfully. SVP and CFO Jerome Rouquet explained the $25 million increase in EBITDA guidance is driven by strong H1 operational performance, the net impact of non-recurring commercial recoveries ($15-20 million incremental for the year), and a small benefit from acquisitions, resulting in a normalized margin outlook of around 12.5% for H1 and 12% for H2.

Mark Delaney inquired about Visteon's confidence in passing potential tariff costs to OEM customers and whether the new business bookings environment has been impacted by the uncertainty.

Answer

CEO Sachin Lawande stated that while the primary focus is on working with customers to reduce tariff exposure, Visteon fully intends to pass on any unavoidable costs. He affirmed that the new business environment remains "remarkably stable" with a robust pipeline, and he expects to achieve the full-year bookings target. CFO Jerome Rouquet added that the Q1 tariff impact was immaterial due to proactive inventory management.

Mark Delaney from Goldman Sachs Group, Inc. asked about SmartCore bookings performance in 2024, progress with multi-domain controllers, and the updated timeline for reaching $1 billion in revenue. He also inquired about the 2025 bookings outlook.

Answer

President and CEO Sachin Lawande attributed the lumpy nature of SmartCore wins to a lower level of customer quoting activity in 2024, as OEMs dealt with evolving EV demand. He noted that while some body control functions are being integrated, Visteon does not yet see a trend of integrating ADAS into a single compute cluster. Lawande expressed confidence that quoting activity will rebound in 2025 and reaffirmed the company's target to secure $6 billion or more in new business wins for the year.

Mark Delaney asked for the key drivers behind the increased full-year EBITDA guidance despite slightly lower revenue, questioning if temporary factors were at play. He also inquired about the implications for Visteon's BMS business from a key customer's planned shift from pouch to prismatic battery cells.

Answer

An executive, likely CFO Jerome Roquet, attributed the stronger EBITDA outlook to sustained operational efficiencies and better-than-expected engineering cost control throughout the year, stating there were no major temporary items boosting the results. CEO Sachin Lawande clarified that Visteon's BMS platform is agnostic to battery cell chemistry and form factor, meaning a customer's shift to prismatic cells requires no design change and is a key competitive differentiator.

Mark Delaney asked when Luminar expects to realize material revenue from new commercial markets, whether the planned OpEx reduction accounts for these new investments, and if the company is re-evaluating its automotive focus between ADAS and robotaxis.

Answer

CEO Paul Ricci responded that Luminar is already realizing revenue from commercial markets, which is a material part of this year's revenue, and expects growth in 2026. He confirmed these investments are consistent with the OpEx reduction targets. He also clarified the strategic shift is due to slower-than-expected L3 adoption in passenger vehicles, not a pivot to robotaxis.

Mark Delaney from Goldman Sachs sought clarification on whether the 'Halo' roadmap update represented an incremental standardization or a continuation of the existing strategy, and asked about the process for converting new business wins.

Answer

CFO Tom Fennimore clarified that while the Halo design is unchanged, the company is now fully aligning its organization around this unified architecture. He noted that advanced prototypes are being delivered to customers, which they are confident will convert into series production contracts in the near future, managed by Luminar's deep and experienced team.

Mark Delaney requested an update on the development of Iris+ and its expected shipping timeline for series production. He also asked for a comparison of the new Volvo model win relative to the EX90 in terms of vehicle size and production timing.

Answer

CFO Tom Fennimore explained that for Iris+, the company is leveraging more of the industrialized Iris architecture and that the first samples are currently undergoing testing with a lead customer. Regarding the new Volvo win, he stated the vehicle model is smaller than the EX90 and is expected to launch within the next several quarters. CEO Austin Russell added that the long-term goal is to expand across Volvo's entire vehicle lineup.

Mark Delaney of Goldman Sachs inquired about the business award and bookings environment year-to-date, the net effect of changing U.S. emissions policies on Magna's growth, and the key drivers bridging the updated revenue outlook from the previous quarter.

Answer

CEO Seetarama Swamy Kotagiri stated that the bookings cadence for 2025 is good and in line with plans, despite some program shifts. He explained that policy changes creating more ICE/hybrid demand are manageable, and a future BEV rebound would be a tailwind since major investments are complete. VP of IR Louis Tonelli clarified the $400M revenue outlook increase was driven roughly half by favorable currency and half by a better-than-anticipated program mix, which offset lower North American volumes.

Mark Delaney of Goldman Sachs inquired about OEM plans for vehicles exported to North America now facing tariffs and asked for an update on the previously guided 75 basis point EBIT margin tailwind.

Answer

CEO Seetarama Kotagiri noted that while a macro impact on vehicle imports is likely, Magna's direct customer production schedules remain stable for now. He confirmed the company is still on track to achieve its operational margin improvement target of roughly 35 basis points in 2025 and a similar amount in 2026, driven by a continued focus on cost discipline and operational excellence.

Mark Delaney asked about the growth trajectory for Magna's China business and what percentage of total revenue it might represent. He also requested detail on the drivers of lower net engineering spend and whether it signals a strategic shift to margin over growth.

Answer

CFO Patrick McCann stated that China sales are expected to grow from about $5.6 billion in 2024 to over $6 billion by 2026. On engineering spend, he reiterated a plan to reduce it by a net $400 million over 2025-2026, explaining it's due to having core spending behind them, not a sacrifice of growth. CEO Seetarama Kotagiri added that the reduction is about efficiency and discipline, not cutting at the expense of profitable growth.

Mark Delaney from Goldman Sachs inquired if Magna still expects its 'Megatrend' business areas to reach breakeven in 2026 given the revised outlook, and asked for an update on a previously mentioned low-cost EV program with a leading North American EV maker.

Answer

CEO Seetarama Kotagiri stated that due to market flux, the company is not providing specific breakeven timing for Megatrend areas. CFO Patrick McCann added that the EV-related sales reduction impacts businesses beyond Megatrends, such as seating. Regarding the low-cost EV program, Kotagiri confirmed it has been removed from the forecast based on customer program timing and declined to speculate on its future.

Mark Delaney requested commentary on FSD subscription trends and take rates following recent trials, and asked how Tesla is thinking about vehicle pricing as a tool to drive volume, especially with the upcoming expiration of IRA tax credits.

Answer

CFO Vaibhav Taneja reported a 25% increase in the FSD penetration rate in North America since the launch of version 12. CEO Elon Musk added that a primary challenge is educating consumers who are unaware of the feature's existence. Regarding pricing, Musk acknowledged the potential for a 'few rough quarters' due to lost incentives but expressed confidence in the company's economics by the end of next year as autonomy scales.

Mark Delaney of Goldman Sachs questioned the future trajectory of the Price Per Unit (PPU) metric given competing positive and negative pressures, the specific circumstances that led to the lawsuit against Microsoft, and whether the legal dispute would impact their ongoing business partnership.

Answer

CFO Antonio Rodriquez explained that while the company is not providing forward guidance on PPU, factors like higher technology take-rates and an increasing mix of connected cars could offset pricing pressures. Executive Brian Krzanich added that the lawsuit against Microsoft is strictly about protecting Cerence's IP and ensuring proper compensation. He firmly stated that the legal matter is separate from their business operations and that the two companies continue to collaborate on a technical level, including on projects like ChatGPT integration for vehicles.

Mark Delaney inquired about the competitive landscape for generative AI-powered digital assistants, how Cerence's market share might trend, and the final annualized savings from recent restructuring actions.

Answer

CEO Brian Krzanich stated the competitive landscape remains consistent, featuring players like Google, Amazon, and SoundHound. He highlighted Cerence's advantages in being LLM-agnostic, offering deep customization, and providing strong embedded capabilities. Krzanich noted that while market share is flat with Western OEMs due to challenges in the China-for-China market, the company aims to gain share through its advanced product roadmap. He also confirmed that FY25 cost savings are from completed actions, with further benefits from ongoing process improvements expected in FY26.

Mark Delaney asked for QuantumScape's view on the competitive landscape, especially in light of recent fast-charging LFP battery announcements from competitors like BYD and CATL. He also questioned whether the Murata collaboration is essential for cost-effective scaling or simply a way to accelerate the timeline, and if PowerCo would be involved in that agreement.

Answer

CEO Dr. Siva Sivaram acknowledged the progress from Chinese competitors but emphasized that their announcements often lack complete data on safety, cycle life, and other trade-offs. He positioned QuantumScape's QSE-5 platform as a 'no-compromise' solution. He clarified the Murata partnership is about accelerating time-to-market and efficiency by combining QuantumScape's IP with Murata's manufacturing scale. He also stated the Murata agreement is directly with QuantumScape, though key partners like PowerCo are kept fully informed and are supportive.