Ladies and gentlemen, thank you for standing by. Welcome to Corning Incorporated 4th Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you would need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. It is my pleasure to introduce to you Ann Nicholson, Vice President of Investor Relations. Please go ahead.

Thank you and good morning, everybody. Welcome to Corning's fourth quarter 2025 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 For the fourth quarter, differences between GAAP and core EPS included non-cash mark-to-market adjustments associated with the company's translated earnings contracts and foreign denominated debt, as well as constant currency adjustments. As a reminder, the mark-to-market accounting has no impact on our cash flow. Reconciliation of core results to the comparable gap 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, and 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.

26% to $0.72. We expanded 70 basis points to 20 points. Achieving 2023 launch point, we grew EPS long-term growth opportunity. Only secured customer contracts, including the one we just announced with Meta, only increase our confidence. We've been getting a lot of questions about the meta agreement from our investors. Before I talk about Springboard in more detail, let me take a moment to outline the key elements. Our operations expansions, we structure our agreements accordingly. These structures include components like customer prepayments and stringent long-term customer commitments to provide revenue. The option of our innovations and market share purposely drew this as a wedge. It won't be a straight line. We're not dealing with a hockey stick. We expect it to start internal plans. Strong momentum enhancing our profitability base. We provided you with one metric to track our progress. An operating margin target of 20% by the end of 2026. 40 basis points. Free cash flow. So let's have an internal plan to now add $11 billion in incremental annualized sales. This represents a double-digit growth rate from the quarter we just closed. This upgrade also impacts this year. From the previous four, you will note also illustrated the tremendous success of our springboard plan to date.

So this morning, I will provide details on our performance, our upgraded springboard plan, and our approach to capital allocation. Let's start with our results. Year over year, in Q4, sales grew 14% to EPS, grew 26% to $0.72. cents 150 and we delivered strong EPS grew more than twice as fast expanded 180 basis points to 19 turning to our business segment optical communication net income significantly which was up 15 percent for the recent meta analysis in the second half of 2024 to ensure we can maintain stable U.S. dollar net income we've hedged our exposure for 2026 and we have hedges in place beyond 2026 through 2030. We continue to expect a margin of approximately consistent with the last five. Turning to specialty materials, the business delivered and net income up to $99 million. For the full year, we outperformed end markets with sales growing 10% to $2.2 billion and net income growing significantly fast, $67 million. Results were driven by increased demand for premium product looking ahead we used to increase demand for our innovations and manufacturing in automotive as additional content is required in upcoming vehicle emissions regulations as an optics gain further adoption in turning to life sciences full-year sales of 972 million prior year prior year to bring up capacity to meet expect our sales to increase and our profitability to be more free continuing to invest strongly in our growth vectors aided by customer financial support we mark the second anniversary of springboard tremendous successfully transformed from q4 25 we exit 20.2 EPS you just heard from Wendell that we are upgrading our springboard sales plan our internal plan now adds 11 billion dollars in incremental annualized sales by the end of 2028 when we started springboard internal and high confidence plans for 2026 our internal plan now adds 6.5 billion in incremental annualized sales by the end of 2026 up from our previous 0.75 we expect to share more with you about our upgraded springboard plan and since our upgraded plan will generate higher inorganic growth opportunities that drive significant return And our investors have significant debt coming to continue our strong track record of returning excess cash to shareholders. We already have a strong dividend, therefore, as we go forward, our primary vehicle for returning excess cash to shareholders will be a track record. Over the last decade, we repurchased 800 million shares, close to a 50% reduction in our- Because of our growing confidence, we started to buy back shares again, and we continue to do so every quarter. expect to continue buying back. Now, before we just report, mentally transform establishing a higher profit. Turn it back to Wendell. Reminder to

ask a question. Please press star one one on your telephone and wait for your name to be announced. And to withdraw your question, please press star one one again. And the first question will come from Wamsi Moen with Bank of America. Your line is open.

yes thank you so much Wendell we'll all have to get together share and stories on this news I I guess like on on my question you noted that there are similar long-term agreements with other major customers to dedicate capacity can you help us think about if any of that is already baked into your springboard plan and secondarily there are the optical fiber market has been very tight globally would you say that you're experiencing supply constraints at the moment and do you have a view on how pricing could evolve on the fiber side given given these kind of constraints let's start each of them No, that's a good one, Wendell. Thank you. Is there a pricing element, Wendell, though?

This question will come from Josh Spector with UBS. Your line is open.

Yeah, hi. Good morning, and congrats, Anne. I wanted to ask first just on similar lines of the capacity that's being added. So if we think about Meta as a share of your enterprise sales today versus what this agreement implies, are they going to disproportionately buy more from you after this agreement? And are you adding capacity to match that added sales, or is it less than that, meaning your capacity might tighten a bit as it relates to this agreement?

A portion of that group is a similar size.

It does. I guess what I'm trying to figure out here, does this, so if we thought hyperscalers were going to grow at X percent meta within one of them, you know, we're baking something like that into our estimates of what your growth would be. You know, does this, it sounds like this kind of codifies that growth and maybe secures them some of that capacity as you grow into the future versus, you know, Corning capturing more share of that pie. That's what I want to make sure I understand is maybe you're

capturing more share of that pie or not. Thank you. Thank you. Thanks, Josh. Next question.

And the next question will come from Meta Marshall with Morgan Stanley. Your line's open.

Thanks. And congrats on the quarter. I just wanted to ask kind of one clarifying question about the Meta deal. Just since you mentioned kind of expansions and high-capacity cable, would any of what is kind of included in that deal be included in the carrier line item, or is that all kind of being counted in enterprise today and going forward? And then maybe on a second question, just if you could kind of give a sense of CapEx for the year as you start to kind of make out some of these capacity investments.

Well, first, I'd like to thank you for that CNBC.

That does, yep.

Can you repeat your second part of the question?

Just the CapEx, how we should think about CapEx. in terms of 2026?

Yeah, so that is good. Our agreement with the customer, so that may show up in the operating cash flow, the cash section, or against our capital, but you can think of us as...

Great, thank you. Next question, please.

And our next question will come from George Notter with Wolf Research. Your line's open.

Hi, thanks a lot, guys. Just to continue on that line of questioning, The $1.7 billion, does that include specific CapEx associated with the meta project, or is that just – there's kind of a gross and a net number here, I think, and I guess I'm trying to figure out – I think the basic idea here for you guys is you're trying to get your customers to pay for more of your capital expansions or capacity expansions, and I guess I'm just trying to figure out, you know, how much of this is ascribed to the customer and how much of this is on Corning.

Thanks. And then just one other question. You know, certainly not every major customer – certainly you'll have customers in the optical business that won't sign contracts like this. I assume that with those other customers, those guys will be looking at price increases. Is that a part of the strategy here? Thanks.

As far as our –

Thank you.

And the next question will come from Stephen Fox with Fox Advisors. Your line's open.

Hi. Good morning. First of all, congrats to Anne. I'm pretty sure you could probably do another 40 years if you wanted to, but congrats and thanks for all your help.

I guess just on everything that was announced around optical, I was wondering if you could fill in the blanks on two things. One is you seem to be pushing more and more assets towards U.S.-North America production, and I was curious how you feel about international markets for Corning in the coming years.

And secondly, Ed, I understand, you know, not changing the operating margin target yet for the company as a whole, but it seems like everything you talked about around optical is pretty positive for optical zone operating margin.

So, like, maybe you could sort of give us some clues as to how that could influence the overall corporate average. Thanks.

and our profitability and our cash generation was such a huge cover operating from our financial

profile. We needed to get our returns up. We needed to generate more cash, and we've significantly done that. We feel great about it. Optical's actually been a huge component of that. We've been talking specifically about their net income margin over the last year or two, and that's now at 18. From here forward, I think you're right. It could do that for periods of time. It could be We really like a financial profile, and we want to focus on improving our return on invested capital, and we want to generate more cash. So we want to make sure we capture all the growth. That's primarily why we're not significantly, and we think that return profile is very important.

Great. That's super helpful. Thank you.

Next question.

Next question will come from ASEA Merchant with Citi. Your line is open.

Great. Thanks for the question, and congrats again, Anne, on the retirement. You'll be missed. Wendell, if I may, a question for you on the optical side of things. You've talked a lot about, you know, CPO and the scale-up opportunity. So given the growth profile that you guys are talking about here with, you know, additional commitments from hyperscalers coming forth, Can you just remind us, you know, is scale-up included in that outlook through, let's say here, through the 28th, or are we looking at that opportunity further beyond? Thank you.

We do not have our scale-up. Transmitting with photons is in using electrons, even in various switches, 20 times.

Yes, that's great. If I may, one for Ed as well. Ed, you talked a little bit about operating margins or net income margins for optical. Can you just remind us, like, within this springboard, you know, how we should think about margins for the solar business that's ramping up here and expected to, I think, drive margins which are at or accretive to corporate? So if you can just remind us where we are on that ramp and what it looks like within the updated springboard. Thank you.

Yeah, thanks. So as we've shared...

Next question will come from Tim Long with Barclays. Your line is open.

Thank you. Two if I could as well. One on the optical side, if you could go back to the carrier piece. You know, just want to, you know, understand how you're thinking about this business going forward. I think historically, you know, we've seen pretty big cycles here, a few good years, and then some catch-up, you know, inventory, whatever. But now there's a lot more data center in that line. So when you think about the carrier business over the next few years, do you think the cyclicality of the business has changed and it's a little bit more secular? I'd love your thoughts on that. And then second, maybe if we could just touch on display. I think the end has moved back the last few weeks, but it was getting up there. So, Ed, if you could just talk, I get you're managing to that 25% and $900 to $950 of net income. Is there a scenario, and I know you have hedges, where we might need to see more price increases, or where are we with the flow through of the last set of price increases? Thank you.

Yes, or connect portion of being driven by.

Yeah, yeah, that's helpful. Thanks. And then on to display.

You know, to the extent, we need to a weaker yen than what...

Thanks, Ed. Okay, thank you. We'll take one last question.

Okay, and our last question comes from John Roberts with Mizuho. Your line is open.

And congrats as well, Ann. I hope you're headed someplace warm. What percent of bare fiber is currently used internally for cabling? and are you importing any bare fiber into the U.S.?

Thank you. Thank you for joining us today. I wanted to let you know before we go that we're going to attend the Susquehanna Tech Conference on February 27th and the Morgan Stanley Tech Conference on March 3rd. 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. So thanks again for joining us and for the well wishes for me. Operator, that concludes our call. Please disconnect all lines.

Thank you for participating, and you may now disconnect.