Thank you, and good morning. Welcome to Corning's fourth quarter 2024 earnings call. With me today are Wendell Weeks, Chairman and Chief Executive Officer, and Ed Schlesinger, Executive Vice President and Chief Financial Officer. I'd like to remind you that today's remarks contain forward-looking statements that fall within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks, uncertainties and other factors that could cause actual results to differ materially. These factors are detailed in the company's financial reports. You should also note that we'll be discussing our consolidated results using core performance measures unless we specifically indicate our comments related to GAAP data. Our core performance measures are non-GAAP measures used by management to analyze the business. For the fourth quarter, the differences between GAAP and core primarily reflected non-cash mark-to-market adjustments associated with the company's translated earnings contracts and Japanese yen denominated debt, as well as constant currency adjustments and other non-cash charges. As a reminder, the mark-to-market accounting has no impact on our cash flow. A reconciliation of core results to the comparable GAAP value can be found in the Investor Relations section of our website at corning.com. You may also access core results on our website with downloadable financials in the interactive analyst center. Supporting slides are being shown live on our webcast. We encourage you to follow along. They're also available on our website for downloading. And now, I'll turn the call over to Wendell.

Thank you, Ann, and good morning, everyone. Today, we announced fourth quarter and full year 2024 results. We had another outstanding quarter. We grew sales 18% year-over-year to a record $3.9 billion, and grew EPS 46% to $0.57. We expanded operating margin by 220 basis points to 18.5%. We also expanded return on invested capital 390 basis points to 12.7%. Additionally, for the full year, we generated strong free cash flow, delivering $1.25 billion for 2024, up 42%. Overall, these results capped off a terrific first year of Springboard. So, I want to review our performance in the context of our Springboard plan. As we've laid out for you, we're pursuing growth across the company of $8 billion in annualized sales run rate by the end of 2028, driven by the convergence of upward cyclical and secular trends in our markets. And we've taken this internal non-risk-adjusted plan and created a high-confidence plan for investors. First, we focused on a three-year time period, which reflects a $5 billion non-risk adjusted opportunity by the end of 2026. Second, we probabilistically adjusted for different potential outcomes, including market dynamics, timing of secular trends, successful adoption of our innovations, as well as volume pricing and market share across all of our businesses, and the potential that some of our markets may go through downcycles. And this is how we formulated our high-confidence Springboard plan to add more than $3 billion in annualized sales and to achieve operating margin of 20% by the end of 2026. Now, it's important to remember we purposely drew the $3 billion Springboard plan as a wedge. We weren't trying to guide every quarter for the next 12 quarters. So, as you can see, we're off to a great start. Our quarter four sales were $3.9 billion. So, in year one of the plan, we added $2.4 billion to our annualized sales run rate from our Springboard base. And on that strong sales growth, we demonstrated the powerful incrementals that are embedded in our plan. Year-over-year, in the fourth quarter, we expanded operating margin by 220 basis points to 18.5%. We grew EPS 46% to $0.57. We expanded ROIC 390 basis points to 12.7%. And we closed out a strong year of free cash flow generation, delivering $1.25 billion in 2024, up 42%. So, what's driving our outperformance versus our high-confidence plan? When we introduced Springboard, we told you that it was a milestone-based plan. In 2024, we hit key strategic milestones in Display and Optical. In Display, our Springboard plan is centered on maintaining stable US dollar net income. To achieve this in a weaker yen environment, we raised glass prices in the second half of 2024 to deliver consistent profitability in the segment. We expect to deliver net income of $900 million to $950 million this year, and to deliver net income margin of 25%, consistent with the last five years. Overall, we're providing a strong base in Display for our Springboard growth. In Optical Communications, our Springboard plan is about revenue growth as upward cyclical and secular trends converge to drive demand for our unique capabilities. We introduced new GenAI products in June of 2024, and we said we expected to grow our Enterprise business at a 25% compound annual growth rate through 2027. Demand for our new GenAI products grew each quarter, and sales in the Enterprise portion of our Optical business grew 93% year-over-year in the fourth quarter. And for the full year, Enterprise grew to a record $2 billion, up 49% year-over-year. That growth reflects the GenAI opportunity inside the data center. We've also introduced a set of innovations to help our customers build a new network to interconnect AI-enabled data centers between the cities. As part of an agreement with Lumen Technologies, which reserves 10% of our global fiber capacity for 2025 and 2026, we launched the first outside plant deployment of Corning's new GenAI fiber and cable system that enables Lumen to fit anywhere from 2 to 4 times the amount of fiber into their existing conduit. And just this month, we started shipping, and Lumen has begun deploying our new data center interconnect products. Overall, strong customer response to our new products drove sales of $1.4 billion in Optical in the fourth quarter, reflecting 51% year-over-year growth. And we expect continued growing demand in Optical in 2025 and beyond. So, I've highlighted just two of the key milestones that are contributing to the outperformance of our Springboard plan in year one. We're pursuing a rich opportunity set that extends across our portfolio, including solar, automotive, and mobile consumer electronics. And the progress we've made increases the probability that our sales will be above our high-confidence sales run rate by the end of 2026. As a result, we are planning to upgrade our $3 billion Springboard plan at our March Investor event.

Thank you, Wendell, and good morning, everyone. As you just heard, we had another outstanding quarter and completed a strong first year of our Springboard plan. Cyclical and secular trends are driving demand for our products. We have the capacity and technical capabilities in place to add more than $3 billion in annualized sales by the end of 2026. And the cost and capital are already reflected in our financials. So, this means that as we grow, we expect to grow profit significantly faster than sales. And that's exactly what you saw in the fourth quarter. Sales grew 18% year-over-year to $3.9 billion and EPS grew 46% to $0.57, more than 2 times the rate of sales. Operating margin expanded 220 basis points to 18.5%, marking strong progress on the target we've shared to achieve 20% operating margin by the end of 2026. Overall, it was a terrific quarter and we expect our momentum to continue in 2025. In the first quarter, we expect sales to grow 10% year-over-year to approximately $3.6 billion, with core EPS growing approximately 30% to a range of $0.48 to $0.52. Based on our strong performance, we continue to track ahead of our Springboard plan. So, this morning, I want to share more details and perspective on our quarter and full year results. For the full year, we grew sales 7% to $14.5 billion. At the same time, EPS grew 15% to $1.96. Gross margin expanded 190 basis points to 38.2% and operating margin expanded a full percentage point to 17.5%. We increased free cash flow by $373 million versus the prior year to $1.25 billion. Moving to the segments. In Optical Communications, fourth quarter sales were $1.37 billion, up 51% year-over-year. Full year sales grew 16% to $4.66 billion. In our Enterprise business, sales were $686 million for the quarter, up 93% year-over-year, driven by the continued strong adoption of our new GenAI products. This marks another record quarter of growth in this business. And for the full year, Enterprise grew 49% to $2 billion. We also grew year-over-year in our Carrier business in the fourth quarter as customers continued to buy closer to their rates of deployment. Net income for the full year and fourth quarter reflected strong incremental profit on higher volume. For the fourth quarter, net income for the Optical Communications segment grew 120% year-over-year to $194 million. And for the full year, net income grew 28% to $612 million. Overall, we expect our unique capabilities in Optical Communications to drive continued growth in 2025 and beyond. In Carrier, we expect deployments to increase in 2025 as indicated by carrier customer conversations and public announcements. We also expect growing demand for our connectivity products for GenAI, and we're just beginning to ship our new data center interconnect products to Lumen in the first quarter. Moving to Display Technologies, fourth quarter sales were $971 million, up 12% year-over-year. Net income was $262 million. Full year sales grew 10% to $3.87 billion. Net income was up 19%. The retail and glass market grew year-over-year as measured in square feet, driven by larger average screen sizes. Late in the quarter, panel makers increased their utilization rates as set makers upped their orders, driven by government stimulus in China. We expect panel makers to continue at these utilization rates in the first quarter of 2025. As we shared with you in September and on our third quarter earnings call, we raised glass prices to maintain consistent profitability in the segment. We've successfully implemented double-digit price increases in the second half of 2024 to ensure we can maintain stable US dollar net income in a weaker yen environment. We continue to expect to deliver net income of $900 million to $950 million in 2025 and net income margin of 25%, consistent with the last five years. Turning to Specialty Materials, in the fourth quarter, sales were $515 million, up 9% year-over-year and down 6% sequentially. Full year sales grew 8% to $2 billion as we advanced our More Corning content strategy in both Gorilla and Advanced Optics. Net income grew 40% year-over-year in the fourth quarter to $81 million and was up 29% for the full year to $260 million, reflecting strong incrementals on higher volumes as well as strong demand for our premium glass innovations. In Environmental Technologies, our fourth quarter sales were $397 million, down 7% year-over-year, driven by weaker light-duty and heavy-duty markets in Europe. Full year sales were down 6% year-over-year as we continued to experience weaker global heavy-duty markets, particularly in Europe. Net income of $81 million for Q4 was down 17% year-over-year, reflecting lower volume. Net income for the full year was $358 million, down 7% on lower sales. In 2025, industry analysts expect the global light-duty market to remain flat and for the heavy-duty market to be down slightly, primarily in North America. In Life Sciences, fourth quarter sales were $250 million, up 3% year-over-year, and net income grew 6% year-over-year. Full year sales were $979 million, up 2% as the market stabilized throughout the year. Net income grew 26%, significantly faster than sales. And finally, in Hemlock and Emerging Growth Businesses, fourth quarter sales were $373 million, up 5% year-over-year. Full year sales were $1.28 billion. As you can see, we're making strong progress on Springboard. And as we enter 2025, we expect our momentum to continue. In the first quarter, we expect sales to grow 10% year-over-year to approximately $3.6 billion, with core EPS growing approximately 30% to a range of $0.48 to $0.52. Additionally, we have hedged our yen exposure for 2025 and 2026. We also have hedges in place beyond 2026. In 2025, we will be resetting our yen core rate to JPY120 to $1, consistent with our hedge rate. We have reflected the JPY120 core rate in our Q1 guidance. We do not plan to recast our 2024 financials because we expect to maintain the same profitability in Display at the new core rate. And as I said earlier, in Display, we expect to deliver net income of $900 million to $950 million in 2025, and net income margin of 25%, consistent with the last five years. Now, I'd like to spend a minute on capital allocation. I've told you that we have the capacity and technical capabilities in place to add more than $3 billion in annualized sales by the end of 2026. So, we expect to deliver strong incremental profit and cash flow as we capture the sales growth opportunity outlined in our Springboard plan. One proof point from the first year of the plan is that we grew free cash flow by 42% in 2024 to $1.25 billion. And as our execution of Springboard continues, we expect to generate significant cash in 2025. Our capital allocation priorities remain the same. We prioritize investing for organic growth opportunities. We believe this creates the most value for our shareholders over the long term. In 2025, we expect our capital expenditures to be approximately $1.3 billion. We also seek to maintain a strong and efficient balance sheet. We're in great shape here. We have one of the longest debt tenors in the S&P 500. Our current average debt maturity is about 23 years, with only about $1.2 billion in debt coming due over the next five years. And we have no significant debt coming due in any given year. And finally, we expect to continue our strong track record of returning excess cash to shareholders. We started to buy back shares in the second quarter and we have continued to do so throughout 2024. So, as I wrap up today, I'd like to reiterate that we had an outstanding fourth quarter that capped off a strong first year of Springboard. Compared with Q4 2023, our starting point for Springboard, sales grew 18% year-over-year to $3.9 billion, EPS grew 46% to $0.57, and operating margin expanded 220 basis points to 18.5%, marking strong progress on the target we've shared to achieve 20% operating margin by the end of 2026. Looking ahead, we expect 10% year-over-year sales growth in the first quarter, with EPS growing about three times faster. And we expect to sustain our momentum throughout 2025. In total, we're tracking ahead of our high-confidence plan to add more than $3 billion in annualized sales by the end of 2026. And we look forward to our March Investor event when we plan to provide you with an update to our high-confidence Springboard plan. Thank you, everyone. And with that, I'll turn it back over to Ann.

Thanks, Ed. Okay, operator, we're ready for the first question.

Thank you. Our first question comes from Samik Chatterjee with JPMorgan. Your line is now open.

Hi, thanks for the question. This is Joe Cardoso on for Samik. I guess maybe just for my one question, and I'm not trying to get ahead of the Investor event, but maybe Wendell, can you just elaborate on your comments a bit more around an upgrade or the potential upgrade to the risk-adjusted plan? However, you're still feeling comfortable around the non-risk-adjusted plan. Obviously, the implications there are that the upgrade could land somewhere between those two plans at least for your 2026 targets that you provided. And if so, maybe can you just help us think about the lingering risks or the major risks from your perspective that Corning is still looking to navigate to achieve the non-risk-adjusted plan at least relative to the 2026 targets? Thank you.

Thanks for the question, Joe. I think actually in your question, you had the answer, which is, yes, you understand exactly what we're saying. When we go through our full strategic review, we work our way through all of those various scenarios and where we came back is that that long-term plan to generate $8 billion, that target remained quite appropriate. And that what's happened is that if you take a look at the full distribution of potential outcomes that the probability has shifted towards higher numbers being more probable with underneath between that $8 billion and our risk-adjusted plan. So, we'll have a number that will be between those two and we'll fill that out in March. And at that time, what we'll also do is we'll talk some about the milestones that are ahead. Was that answer clear or did I make it more confusing, Joe?

No, no, very clear. I guess, Wendell, what I was just trying to get at more is just around like the risk that you still see ahead. I think at the time or even in the call itself today, you mentioned that obviously Optical is tracking ahead. And I think the risks back in June, you talked about timing around projects getting done and then Display obviously was another one of the bigger risks relative to the plan. So, as you think about today and now starting to get ahead of some of those or those checkmarks around some of those risks being in the rearview mirror, I guess as you think about the plan, which are the major risks that are still ahead that you think are still left to navigate?

I prefer to view this as milestones rather than risks. For example, in the Optical segment, we are observing year-over-year growth in Carrier as their purchases from us are now aligning with their deployment rates. Previously, we noted that Carriers had overstocked inventory compared to their deployment, and we anticipated that these factors would eventually balance, leading to recovery. We are beginning to see this, but we would like to observe further progress. In our solar segment, there are several key milestones that we need to achieve for that business to reach the scale suggested by our non-risk-adjusted plan. Additionally, we are working on significant innovations in mobile consumer electronics that could increase our presence in this relatively stable market as our innovations gain traction. In the automotive sector, we have important milestones to reach regarding our automotive glass and the adoption of GPF technology in the US ICE market. These examples highlight some of the key milestones we still need to reach to fulfill our full non-risk-adjusted plan. Was that helpful, Joe?

Yes, Wendell. Thank you. That's great. Appreciate the color.

Great. Next question?

Our next question comes from the line of Mehdi Hosseini with Susquehanna. Your line is now open.

Hi. Congrats on the quarter. This is Bastien filling in for Mehdi. So, you expect Carrier deployments to increase in 2025 and growing demand for connectivity products. Is that excluding Lumen? So, that'd be my first question. And my second question is, could you maybe give us a little bit of color on where you're guiding on those 10% year-on-year sales growth? If you could provide a little bit of color on if you're still seeing Enterprise being strong? And also, if you could touch a little bit on the Display market?

Yeah, thank you for those questions. So, first on Carrier, yes, we did start shipping Lumen right here just now in the first quarter and that will ramp as we go through the year. When we talk about Carrier deployments increasing, I would say it's broader than Lumen, but I would also say that the number one indicator is what we see in our order book. So, we're not necessarily starting out right here expecting a big ramp in Carrier deployments in the first half of 2025. So, we expect Carriers other than Lumen to increase deployments, but not so much early in the year. And then, to your Enterprise question, we definitely expect our momentum to continue into 2025. And certainly, in the first quarter, our year-over-year guidance implies a strong Enterprise segment in the first quarter. And then, I think your last part of your question was on the Display market. What I would say on Display is, we saw growth in glass in 2024 year-over-year, primarily from screen size. The IT market was also up year-over-year in that space. Panel makers ran relatively strong in the fourth quarter. We're expecting them to kind of run at that rate as they go into calendar year 2025. That said, we provided you with a guide for full year Display on net income, which of course implies a sales guide as well. So, it's possible that the back half is a little bit lower in Display if the front half is a little bit stronger. So, we would expect screen size to continue year-over-year to really be driving any growth in Display in the glass market.

Very helpful. Thank you.

Thanks, Ed. Okay, next question?

Our next question comes from the line of Asiya Merchant with Citi. Your line is now open.

Great. Thank you, and congratulations on a great set of numbers. Two questions, if I may. The Optical demand is obviously ramping up really well. Can you talk a little bit about how we should think about net income margins in that segment? It expanded a little bit relative to the last quarter. Growth was strong on the top-line. So, as we think about the momentum here and the drivers for growth in Enterprise more strongly than Carrier, how should we think about the net income margin performance in that segment? And the second one on cash flow. How should we think about free cash flow margins as you progress towards your Springboard plan and exceed that high-confidence Springboard plan in 2025? Thank you.

Yeah, thanks, Asiya, and thanks for the nice comments. First, on Optical, I think the thing to think about is our sales have ramped significantly through the year, especially in Enterprise, and we're expecting that to continue. So, we have some costs to actually be able to serve the higher sales and the expected higher sales that we have going into 2025, and that is having a little bit of an impact on our Optical margins here in the fourth quarter. So, I would expect our margins to continue to improve in Optical as we go into 2025. And then, on cash, as we sort of started out the year, our expectation was that we wouldn't need to add a lot of capacity, and that has turned out to be true, and I think our capital guidance continues to imply that. So, our free cash flow was up very nicely year-over-year, and we expect free cash flow to continue to improve. I want to think a little bit about your question on margin, cash flow margin, so I'll come back to you on that. But the other thing I would add is that as we exited the year, we did build some working capital in AR and inventory. And again, I attribute that to just the ramp in sales. So, that actually bodes well as we go into 2025.

Thanks, Ed. Okay, next question?

Our next question comes from the line of Wamsi Mohan with Bank of America. Your line is now open.

Yes, thank you so much. Wendell, your Optical business is clearly benefiting from the GenAI deployments, and we've heard a lot of market dislocation over the last week from DeepSeek. So, I'm curious about your view on DeepSeek's impact on AI build-out more broadly and for Corning in particular.

Well, thanks for that opportunity, Wamsi. First and most importantly for Corning investors, we don't see any negative impact on our Springboard plan to deliver our $3 billion-plus revenue by the end of 2026 from the DeepSeek set of announcements. So, from a Corning perspective, we don't see any significant impact. More broadly, I think you're interested in is DeepSeek has actually been a topic of focus for the technical community for the last two or three months from when they first did their V3 late last year. To reduce the cost of training, they appear to have used both innovations that are already in use by the leaders in the space, as well as some innovations that are a little ahead of the industry at this time. And I just think more will become public as to everything that went into their set of innovations as time goes by. Stepping back, I think what's super important to understand is that we need dramatic improvement in training and inference cost to make GenAI into a highly sustainable business model and, more importantly, the productivity driver that we all hope it will be. So, we need sort of order of magnitude type improvements. And so, we should always expect there to be significant innovations are going to continue here, right? And in many ways, all of us in this space are counting on many more innovations to come, so that this realizes its ultimate potential. There is nothing in all of this that would say the need for better compute and better communications doesn't make models better. Does that make sense to you, Wamsi?

Yeah, no, it does. I appreciate that answer. Thank you, Wendell. And one for Ed, if I could. Just one quick clarification on the core rate of JPY120. Would this core rate be static again for a few years as you have had in the past? And that's my quick clarification. And secondarily, would you say that as you think about 2025 in your guidance for CapEx over here, you're just coming off a pretty low year of CapEx relative to last several years, and it's ticking back up. Can you just help us think through what are the incremental places where investments are going on that incremental CapEx? Thank you.

Yeah. Maybe on CapEx, just real quick, we had been guiding around $1.2 billion for most of the year. We came in a little below that. There's always a little bit of timing in terms of how we're spending. But I think the most important thing to think about is our depreciation is about $1.3 billion. So, if we're spending capital at that level or below that level, we're really not adding any material capacity, and our guide for next year is in line with that thinking. So, we always need a little capacity here or there or we add technological innovation, capital for new technology, but that's how I'm thinking about it. We're really not adding anything significant in our 2025 guide. On the core rate, so maybe just stepping back, we've been talking about what we've been doing in Display. So, the most important thing is that we were able to raise our prices double-digits in the back half and that's actually in our kind of guide or our run rate as we go forward. We were able to hedge 2025 and 2026 at the JPY120 rate. So, at least my expectation is no change for that time period. We also have hedges in place beyond 2026, and we'll come back as the year progresses and share our thoughts on how to think about it beyond that 2026 time window.

Okay, great. Thank you so much.

Great. Next question, please.

Our next question comes from the line of John Roberts with Mizuho. Your line is now open.

Thank you. How do you think about the risk of the BEAD program being reworked and maybe satellite playing a more significant role? It seems like this administration is willing to go back into programs already well underway.

Thanks for the question, John. Within our overall Springboard plan, one of the things we've accounted for in our sort of derating between non-risk-adjusted and our risk-adjusted plan is how effective and how broadly BEAD would be used. We weren't counting on it to become any degree of revenue even in our non-risk-adjusted plan until 2026. So, one of the things we updated as part of our strategy planning process was how do we feel about where fiber optics would deploy versus satellite being a better economic answer. After we worked through all of those pieces, what we basically came back with were some modifications, but nothing that would change our fundamental Springboard thesis, John.

And then maybe a quick one for Ed, but the Hemlock minority interest income surged. What's going on there? And will you break out Hemlock sales beginning in the March quarter?

Yeah. So, two things, John. We have a few joint ventures that impact our minority interest line. Hemlock did actually have a strong fourth quarter. A lot of their semiconductor polysilicon contracts are back-end loaded. So that does drive our minority interest up high in the fourth quarter or higher, just given the higher sales, higher income. And yes, our intention would be as we go into 2025 to provide some updates to our segment reporting. You've heard us talk about graduating our automotive glass business out and breaking out solar/Hemlock. So that continues to be our plans. And after we file our 10-K and move past this year, we'll provide some more insight on that.

Thank you.

Thank you. Our next question comes from Matt Niknam with Deutsche Bank. Your line is now open.

Hey, guys. Thanks so much for taking the question, and congrats on the quarter. Just two from me. First on, I guess, new administration and I'm wondering, is the prospect of newer tariffs implemented by the new U.S. administration hold forward any sort of demand or ordering activity into 4Q or even in the first quarter? And then secondly, maybe for Ed, you talked about the healthy balance sheet position, ramping free cash flow and you talked about buybacks. I'm just wondering, given the dividend was relatively flat last year, how are you thinking about resuming dividend growth in the context of the success of Springboard seen to date? Thanks.

Thanks, Matt. I appreciate your comments and questions. I'll start with your second point. Yes, we have good cash flow, and we've begun buying back shares, which we plan to continue. We haven't set a specific target for this. Regarding the dividend, we currently pay a strong dividend, but I would like our payout ratio to decrease a bit before we consider increasing it again, although that remains a possibility. On the topic of tariffs, I want to acknowledge that we don't yet have a clear picture of the situation, as there are many proposals currently being discussed. We are closely monitoring these developments and won't make any moves until something is officially implemented. For Corning, we generally manufacture where our customers are, so the direct impact of tariffs on our operations is limited. While there is some impact, it's not substantial. We also have the flexibility to adjust our supply chain and raise prices if necessary. Additionally, we manufacture a significant amount in the U.S. and support advanced manufacturing here. We have a considerable presence in our Optical business in fiber and cable, as well as operations in Environmental, Life Sciences, and mobile consumer electronics. This commitment to U.S. manufacturing is important to us. We'll keep tracking the situation, but for now, we don't have any further comments to add. Feel free to contribute.

When you start fine-tuning models, there are several areas to consider. I believe we have seen significant differences in customer behavior regarding our direct sales. In our Display business, panel maker utilization appears to be increasing as they prepare for potential changes. This is more of a close-in modeling issue, Matt. Ed has captured the essential direction we need to take, along with a sense of humility regarding this broader question. Does that resonate with you, Matt?

It does. Thank you, both.

Okay. Next question?

Our next question comes from the line of Meta Marshall with Morgan Stanley. Your line is now open.

Great. Thanks. A couple of quick questions for me. Maybe first, as you started to kind of get the Lumen orders early on, is that kind of tracking to kind of how you thought to the order patterns that you were expecting? And then maybe just a second question on Specialty Materials. Noted kind of it looked like there was an upgrade in the content with the S25 phone from Samsung that just came out. So, just wondering if that kind of impacts the trajectory of the year on Specialty Materials? Thanks.

On the first point, the order pattern is aligning with our expectations. We have been somewhat of a bottleneck due to this being a completely new product. Our focus has been on ensuring we complete all necessary qualification and testing cycles for this product. This has caused delays in shipping, rather than Lumen's willingness to install it. To answer your main question, we are indeed seeing the demand we anticipated. Regarding the second point, we are pleased with their announcement as it aligns with our overall strategy. We are always happy to see our customers using our latest innovations to enhance their products and consider them important enough to promote. That truly makes our day.

Great. Thank you.

Okay. Next question, please.

Our next question comes from the line of Tim Long with Barclays. Your line is now open.

Thank you. I have two questions regarding Optical. First, I wanted to ask about the Enterprise aspect of the business, which I believe used to be split evenly with the data center. It seems that a larger portion is now going to data center customers. Could you provide some high-level insights on that? Secondly, Ed or Wendell, I'm curious about the cyclicality in the Optical Comms business, which has experienced significant years followed by declines of 10% to 20%. How are you approaching cyclicality moving forward? I assume you have strong visibility for 2025. How far does that visibility go for you, and how do you brace for potential cyclicality like we've observed in the past decade? Thank you.

In response to your first question, Tim, our Enterprise business is expected to grow by about 50% in 2024 compared to 2023, with much of that growth coming from the GenAI data center sector. This reflects a shift in the balance between hyperscale or data center and non-data center activities. Regarding the second part, I’d like Wendell to contribute as well, but we currently have good visibility into the near-term, which we define as 2025. We anticipate that our momentum in this area will continue. However, it's important to remain realistic, as there could be times when a build cycle may slow down. Consequently, even if order rates are strong and momentum persists, sales may not grow as significantly as they have in recent quarters. This situation is applicable to both the Carrier and Enterprise sectors.

I think you make a good point, Tim. One of the main differences between our non-risk-adjusted plan and our risk-adjusted plan is timing those capital cycles. The positive aspect at this moment is that historically, one of the major influences on those cycles has been Carrier behavior as new links are introduced. Currently, Carrier is not significantly impacting our recent results; it's more about the recovery of our orders aligning with their deployments. This leads us back to the outlook for hyperscale data centers and their buildouts. We aim to provide more clarity in March regarding our visibility and the reservations on our capacity. This will help explain why we plan to make upgrades and why we’re not solely relying on our non-risk-adjusted plan. Does that resonate with you, Tim?

Yes, it does. Thank you very much.

Okay. Next question?

Our next question comes from the line of Josh Spector with UBS. Your line is now open.

Hey, everyone. This is James Cannon filling in for Josh. I wanted to follow up on the BEAD program. I believe three states have completed their final approval process. Have any orders started coming in for that, or is it still looking towards the 2026 timeline? If you have received any orders, how do they align with your previous target of around a $4 billion total addressable market against the $42 billion allocated program?

Yes. Okay. So first, early stages, Ed has talked about approaching the future with humility. And you'll remember when we introduced BEAD as one of the three potential springs, I also shared that you should approach government programs with some degree of cynicism as well as humility because of how long everything takes. And that cynicism seems to have been well placed. Yes, we are starting to see the earliest trickles, but not enough for us to notice in the size and scale of our numbers, James, right? And yes, what we're seeing supports our view of the TAM. That being said, it's so little data. I wouldn't take it as necessarily reinforcing nor would I say that it would all accelerate our view that this would begin to make a difference anytime between now and 2026.

All right. Understood. Thank you very much.

All right. We'll take one last question.

Our last question is from the line of George Notter with Jefferies. Your line is now open.

Hi, guys. Thanks a lot for squeezing me in. Congrats on the strong results. I guess, I wanted to ask about the JPY120 rate on the yen. I guess that was a lot better than I was imagining just looking at the forward curves we've seen over the last six or nine months. I guess, I'm wondering if the company spent a lot on putting those hedges in place? Or is it the case that we've seen historically where the hedging portfolio has been relatively low cost or no cost for the company? Just trying to understand kind of how you got on that yen rate. And then also, I'd be curious if you could take the Q1 guidance and give us a year-on-year comparison. So, give us a sense for what Q1 of '24 would have looked like at a JPY120 rate on the yen, just to be able to have an apples-to-apples comparison? Thanks a lot, guys.

Yeah, thanks, George. So, I think the short answer is, we were able to use a number of tools like we always do when we hedge the yen to keep the cost very low, to be able to achieve that JPY120 rate. As you know, we've been hedging the yen in other currencies for a long period of time and we've generated a significant amount of gains over $2.5 billion over time. We can go out in time as well to continue to benefit from the rate. And then there are other mechanisms we have. So, generally relatively low cost and all that cost is reflected in our financial statements. On the Q1 guide, we'll take your question and come back. I mean, we're not planning to recast the yen primarily because when you take the impact of our price increases and the change from JPY107 to JPY120, we expect to get to the same level of profitability. So that's the way we've sort of designed our approach to dealing with the weaker yen environment. And so, therefore, we were not intending to do that. But I understand what you're trying to do. When I think about our Q1 guide, Q1 of 2024, we did not have our price increases in there and we were at JPY107. When you go to Q1 of 2025, we have the price increases and we're at JPY120, and we expect to be at or above the same level of profitability. And that's kind of the proof point that we are using to sort of articulate this approach. But we'll come back and talk a little bit maybe offline about what you're seeking.

Super. Thanks very much.

Yeah. Thanks, George. Thanks, Ed. And thank you, everybody, for joining us this morning. Before we close, I wanted to let you know that we're going to be virtually attending the Susquehanna 14th Annual Tech Conference on February 28th. And as we said, we'll be hosting an Investor event in New York City on March 18th. Additionally, we'll be scheduling management visits to investor offices in select cities. Finally, a web replay of today's call will be available on our site starting later this morning. Once again, thank you all for joining us. Operator, that concludes the call. Please disconnect all lines.

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