Tavy Rosner

Tavy Rosner sought clarification on whether Tower Semiconductor ships directly to NVIDIA or through resellers. He also asked about Tower's R&D efforts in co-packaged optics (CPO), specifically if they are working on direct CPU packaging or an end-to-end offering, and inquired about the possibility of the additional CapEx rollout coming online sooner than the end of 2026.

Answer

CEO Russell Ellwanger confirmed that Tower does not ship photonics ICs directly to NVIDIA but through other module makers or integrators. He stated that Tower is working on multiple CPO architectures and with XPU makers on CPO strategies, but not direct CPU packaging. Regarding CapEx, Mr. Ellwanger explained that the bulk of the $920 million investment should be fully qualified by the third quarter of 2026, with tools arriving between now and mid-third quarter, targeting full qualification for customer starts by December 2026.

Tavy Rosner inquired whether Tower Semiconductor directly ships silicon photonics to NVIDIA or through resellers. He also asked about the company's R&D involvement in co-packaged optics (CPO) beyond lasers and power, and the potential for the additional CapEx rollout to be completed sooner than the targeted end of 2026.

Answer

CEO Russell Ellwanger confirmed that silicon-based photonics ICs are designed by and shipped through other module makers or integrators, not directly to NVIDIA. He stated that Tower is working with XPU makers on CPO strategies but not direct CPU packaging. Regarding CapEx, he clarified that the bulk of the $920 million in tools would arrive between now and mid-Q3 2026, with full qualification targeted by December 2026, acknowledging potential minor delays but emphasizing the certainty of the capacity coming online.

Tavy Rosner asked about the footwear market opportunity and Kornit's solutions to address it.

Answer

Ronen Samuel, CEO, described footwear as a new and significant market for Kornit, highlighting positive feedback from leading sports brands. He noted that Kornit is the only innovator in digital footwear, enabling creativity without quantity limitations. He estimated a market opportunity of 2 billion impressions, with consistent growth and a strengthening pipeline.

Tavy Rosner asked about the footwear market opportunity and the specific solutions Kornit offers to address it.

Answer

CEO Ronen Samuel highlighted footwear as a new and significant market for Kornit, where the company is the only innovator in the digital space. He mentioned positive feedback from leading sports brands, emphasizing Kornit's ability to enable creativity and production without quantity limitations. Samuel estimated the market opportunity at approximately 2 billion impressions and noted consistent growth in customer utilization and capacity additions, with a strengthening funnel and pipeline.

Tavy Rosner asked about the demand mix for 2025, specifically the prospect of selling systems via traditional CapEx versus the All-Inclusive Click (AIC) model.

Answer

CEO Ronen Samuel clarified that the roll-to-roll business remains entirely CapEx-based. For the DTG business, he estimated the mix is approximately 75% AIC and 25% CapEx. He explained that new-to-digital customers prefer the predictable costs of the AIC model, while established customers who understand their operational costs often find CapEx more financially favorable.

Tavy Rosner asked about the competitive dynamics in the Actimize business and if NICE was experiencing pressure from new market entrants.

Answer

CEO Scott Russell affirmed Actimize's position as a market leader with high demand, driven by regulatory environments and the importance of financial crime and compliance. Russell highlighted the business's strong cloud potential, momentum, and high customer retention rates, indicating a positive outlook despite competitive activity.

Tavy Rosner asked about the competitive dynamics in the Actimize business, noting an increase in market disruptors.

Answer

CEO Scott Russell affirmed Actimize's position as a market leader with high demand, driven by regulatory environments and the importance of financial crime and compliance. He highlighted the business's strong cloud potential, momentum, and high retention rates, emphasizing its ongoing value to financial institutions.

Tavy Rosner inquired about the demand environment in end markets, asking if weakness was due to longer sales cycles and which specific segments were more or less receptive to their offerings.

Answer

Executive Asaf Berenstin clarified that the issue is not longer sales cycles but a stagnant U.S. market, which contrasts with strong, double-digit sequential growth in Israel driven by cloud, DevOps, and defense sector demand. Executive Guy Bernstein added that U.S. Fortune 500 clients had previously cut projects due to interest rate hikes but the situation has now stabilized with positive signs for Q4.

Tavy Rosner of Barclays asked about the competitive environment, specifically whether Amdocs is concerned that customers transitioning to the cloud might be tempted to use point solutions from competitors.

Answer

CEO Shuky Sheffer expressed high confidence in customer retention during cloud transitions, citing an excellent retention rate. He argued that Amdocs' position often strengthens in the cloud, as its managed services offerings become more comprehensive, frequently including management of the cloud infrastructure itself, which expands their role with the customer.

Tavy Rosner requested further details on the comment that investment decisions were being delayed, asking for specifics on the drivers, geographies, or customer types involved.

Answer

Chief Strategy Officer Alex Zukerman clarified that the delays stem from expanded customer due diligence rather than formal regulatory hurdles. He explained that European carriers, many adopting a full SaaS model for the first time, are exercising extra caution. Additionally, the company's new, more comprehensive 'platform proposition' deals are larger and more complex, naturally leading to longer analysis and contracting cycles for customers.

Tavy Rosner of Barclays PLC inquired about the drivers behind the improved gross margin in equipment sales and why revenues in this segment still lag competitors. He also asked for guidance on the expected CapEx for the upcoming TV service and the company's competitive strategy against similar offerings.

Answer

CFO David Mizrahi explained that the company restructured its handset sales operations to address bad debt and improve credit checks, which is now improving profitability. He expects this will help close the revenue gap in coming quarters. Regarding the TV service, Mizrahi stated that most of the related CapEx was already spent in late 2016, with future costs limited to installation and set-top boxes. He declined to comment on competitive strategy ahead of the launch.

Tavy Rosner inquired about Partner's strategy, timeline, and potential CapEx for its fiber optics deployment, including the necessary regulatory approvals. He also asked how the Filber Committee reform's implementation would facilitate the company's entry into the television market.

Answer

CEO Issac Benbenisti explained that the company is testing a fiber network deployment using G.fast technology and its existing infrastructure. He noted that proceeding with a wide-scale project is contingent on regulatory support from the Ministry of Communication to enforce access to passive infrastructure. Regarding television, Benbenisti stated that for a competitive entry, regulatory changes are crucial, specifically the "must sell" requirement for sports and other key content, as well as the ability to broadcast free channels over the internet. Without these, he argued, it would be difficult to compete with incumbents HOT and YES.