Ladies and gentlemen, thank you for standing by. Welcome to the Silicom Third Quarter 2025 Results Conference Call. As a reminder, this conference is being recorded. You should have all received by now the company's press release. If you have not received it, please contact Silicom's Investor Relations team at EK Global Investor Relations at 1 (212) 378-8040 or view it in the News section of the company's website, www.silicom-usa.com. I would like to hand over the call to Mr. Kenny Green of EK Global Investor Relations. Mr. Green, would you like to begin, please?

Thank you, operator. I would like to welcome all of you to Silicom's quarterly results conference call. Before we start, I would like to draw your attention to the following safe harbor statement. This conference call contains forward-looking statements. Such statements may include, but are not limited to, anticipated future financial operating results and Silicom's outlook and prospects. Those statements are based on management's current beliefs, expectations, and assumptions, which may be affected by subsequent business, political, environmental, regulatory, economic and other conditions and are subject to known and unknown risks and uncertainties and other factors, many of which are outside of Silicom's control, which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements. These include, but are not limited to, Silicom's increasing dependence for substantial revenue growth on a limited number of customers, the speed and extent to which Silicom solutions are adopted by the relevant markets, difficulties in the commercializing and marketing of Silicom's products and services, maintaining and protecting brand recognition, protection of intellectual property, competition, disruptions to manufacturing and sales and marketing; development and customer support activities, the impact of war, rising inflation, changing interest rates, volatile exchange rates as well as any continuing or new effects resulting from pandemic and global economic uncertainty, which may impact customer demand through customers exercising greater caution and selectivity with their short-term IT investment plans. The factors noted are not exhaustive. Further information about the company's business, including information about factors that could materially affect Silicom's results of operations and financial conditions are discussed in Silicom's annual report on Form 20-F and other documents filed by the company that may be subsequently filed by the company from time to time with the Securities and Exchange Commission, the SEC. Therefore, there can be no assurance that actual future results will not differ materially or significantly from anticipated results. Consequently, investors are reminded not to rely on those forward-looking statements. Silicom does not undertake to update any forward-looking statement as a result of new information or future events or developments, except as may be required by law. In addition, following the company's disclosure of certain non-GAAP financial measures in today's earnings release, such non-GAAP financial measures will be discussed during this call. Such non-GAAP measures are used by management to make strategic decisions, forecast future results and evaluate the company's current performance. Management believes that the presentation of these non-GAAP financial measures is useful to investors' understanding and assessment of the company's ongoing cooperation and prospects for the future. Unless otherwise stated, it should be assumed that the financials discussed in this conference call will be on a non-GAAP basis. Non-GAAP financial measures disclosed by management are provided as additional information to investors to provide them with an alternative method for assessing the company's financial conditions and operating results. These measures are not in accordance with or a substitute for GAAP. A full reconciliation of non-GAAP to GAAP financial measures is included in today's earnings release, which you can find on Silicom's website. And with us on the line today, we have Mr. Liron Eizenman, President and CEO; and Mr. Eran Gilad, CFO. Liron will begin with an overview of the results, followed by Eran, who will provide the analysis of the financial results. We'll then turn over the call to the question-and-answer session. And with that, I would now like to hand the call over to Liron, the CEO. Liron, please go ahead.

Thank you, Kenny. I would like to welcome everyone to our conference call to discuss the results of the third quarter of 2025. We are pleased with the ongoing progress that we have made in the third quarter, marked by another period of strong execution in line with our strategic plan and demonstrating solid design win momentum and success across various product lines. The design win momentum is tracking ahead of expectations. Since the beginning of the year, we have achieved 8 major new design wins with important new customers as well as existing ones, which builds out for us an impressive roster of design wins, the key for our expected growth from 2026 and beyond. I remind you that our goal was to reach between 7 and 9 design wins for the full year of 2025. As of the end of October, we have surpassed the lower end of our 2025 target range, and with 2 months left to the end of the year, we are just 1 design win short of the upper end of this ambitious target range. We see new design wins as the most tangible indicator of our progress in addition to the breadth and depth of our opportunities funnel. The focus on our core product lines, coupled with deep relationships with customers and potential new customers, has created this solid funnel. We expect to continue to convert this funnel to further design wins in 2026 and have set for ourselves a new aggressive target of between 7 to 9 additional design wins in the coming year, spanning all product lines, including FPGAs, Edge solutions, and SmartNICs. Our third quarter performance demonstrates that we are successfully advancing and meeting our milestones, and our solid momentum underlies our optimism for returning to double-digit revenue growth in 2026 and beyond. In terms of financial results for the quarter, we reported revenues of $15.6 million in the upper half of the quarter's guidance range. Our balance sheet has remained very strong. At the end of September, our working capital and marketable securities totaled $114 million, including $76 million in cash, deposits, and highly rated bonds with no debt, representing approximately $20 per share. This financial strength provides us with the flexibility that we need to execute on our strategy and seize opportunities as they arise. I would like to focus on our design win momentum. In the third quarter, we secured 3 significant design wins. Earlier this week, we announced another important and fourth recent design win. Each win demonstrates the strength of our product portfolio, the trust of our customer base and, most importantly, it is a solid indication of the successful implementation of our growth strategy. Those new design wins span all our product lines, FPGA, SmartNICs, and Edge networking systems, and are for a variety of applications, underscoring the continued relevance of our solutions across diverse customer needs, market segments, and applications. One of those design wins was awarded by a long-term network optimization customer of ours. This customer selected our advanced Edge system as a platform for several of its next-generation appliances. With this expansion, our business with this customer is expected to increase dramatically to around $4 million annually at a full run rate. This win highlights the natural progression of our deep relationship with this customer from networking cards to FPGA smart cards and now to Edge systems. More broadly, it reflects our strong customer partnership drives, repeat and expanding engagement across all our product lines while also laying the groundwork for other opportunities, including additional innovative Edge platforms currently under discussion. We also achieved the first design win with a U.S.-based provider of multisite networking solutions, which selected our customized edge device to enhance scalability, security, and efficiency across its customer base. Initial deployments are expected to begin by year-end 2025, with a projected run rate of approximately $1 million annually in 2026. Importantly, the customer is pursuing several additional sizable projects, each with multimillion-dollar revenue potential and is in discussion with us regarding another customized edge product for a separate use case, together representing a significant long-term growth opportunity. Earlier this week, we secured a design win from a leading SASE provider, which selected our edge networking system combined with a Silicom NIC to support wired 5G and WiFi connectivity. Initial orders amounted to approximately $0.5 million with full deployment run rate expected to reach around $3 million annually. We see strong further potential, and we are discussing with this customer the adoption of an additional Silicom platform. We were particularly excited to achieve our second post-quantum cryptography-related win from a tech giant within a span of just a few months, providing strong validation of our leadership in this critical emerging space and serving as a reference point for further opportunities. The design win was from a global application delivery leader for our advanced FPGA smart card, incorporating SSL hardware acceleration and post-quantum cryptography offload. This solution will enable the customer to deliver high performance, enhanced scalability, and simplified secure connections. Ramp-up is expected through 2026 with annual revenues anticipated to reach a $2 million run rate. Although quantum computers are not likely to be widely available for several years, suppliers of communications equipment and services must plan now in order to defend effectively against harvest-now-decrypt-later attack strategies. We are seeing that regulators and enterprises are already preparing for the future security threats they pose to privacy since quantum attacks have the potential to break today's widely used encryption standards. Forward-looking companies are, therefore, moving early to integrate PQC into their architectures to ensure business continuity, with emerging privacy and compliance requirements and position themselves as leaders in secure infrastructure in a post-quantum world. Our PQC-ready smart cards put Silicom ahead of the adoption curve at the forefront of this future transition. The fact that we already offer a mature PQC-ready solution differentiates us clearly as an advanced technology partner, bringing us interest from both equipment suppliers and service providers. All those design wins demonstrate again the value of our broad portfolio and our sterling reputation as a trusted partner. Each of those wins represents a combination of extensive technical collaboration and customer trust, reinforcing our strategy of building enduring relationships that evolve into multiple high-value engagements. Together, the design wins achieved throughout 2025 establish a solid foundation for accelerated growth from 2026 onwards and strengthen our confidence in maintaining our momentum into 2026 and importantly, marking our return to long-term double-digit revenue growth. The opportunities funnel remains broad, spanning all our product lines, Edge systems, SmartNICs, and FPGA solutions, addressing both new and existing customers across multiple industries and multiple applications. I urge you to review our investor presentation available on our website, which highlights many of those opportunities as well as has examples of those that have successfully passed through the opportunity funnel to become design wins and sources of recurring revenues. As we move into 2026, we expect to see many more opportunities in our funnel transforming into design wins with numerous new opportunities for all of our product lines consistently entering the funnel. As I mentioned earlier, our newly announced target for 2026 is to achieve 7 to 9 new design wins, driving forward our growth strategy and providing the foundation for sustainable long-term value creation at Silicom. In terms of guidance, for the fourth quarter of 2025, we expect revenues in the range of $15 million to $16 million, and we continue to anticipate a double-digit annual growth rate in 2026 and beyond. Our overall objective remains unchanged: to create significant long-term value for our shareholders by achieving EPS above $3, which we expect to reach as revenue scales to $150 million to $160 million range. Importantly, a faster ramp-up of certain high-potential deals currently in the pipeline would accelerate this timeline, enabling us to achieve our strategic goals ahead of schedule. In summary, we are very pleased with our continued progress in 2025. With 8 major new design wins already secured year-to-date, well within the target range for the full year, we are executing ahead of the plan and building strong momentum across all our product lines. We remain focused on continuing to build long-term customer relationships and expand our design win funnel providing a solid foundation for the accelerated double-digit growth we expect from 2026. With our unique technologies, a highly satisfied and growing customer base, a motivated team, as well as a strong balance sheet to support all our endeavors, we are ideally positioned for 2026 and beyond with the ultimate goal of delivering significant long-term value for our shareholders. We look forward to updating you on our progress as we close out 2025 and head into 2026, which we believe will be an inflection year for Silicom. With that, I will now hand over the call to Eran for a detailed review of the quarter results.

Thank you, Liron, and good day to everyone. Revenues for the third quarter of 2025 were $15.6 million, 6% ahead of the $14.8 million reported in the third quarter of last year. The geographical revenue breakdown over the last 12 months was as follows: North America, 75%; Europe and Israel, 17%; Far East and rest of the world, 8%. During the last 12 months, we had one 10%-plus customer, which accounted for about 14% of our revenues. I will be presenting the rest of the financial results on a non-GAAP basis, which excludes the noncash compensation expenses in respect of options and RSUs granted to directors, officers, and employees, taxes on amortization of acquired intangible assets as well as lease liabilities, and financial expenses. For the full reconciliation from GAAP to non-GAAP numbers, please refer to the press release we issued earlier today. Gross profit for the third quarter of 2025 was $5 million, representing a gross margin of 31.8% compared to a gross profit of $4.2 million or gross margin of 28.8% in the third quarter of 2024. While I note that our short to midterm expected gross margin range remains between 27% to 32%, we are very pleased with achieving a gross margin at the higher end of this range ahead of our strategic plan model. Operating expenses in the third quarter of 2025 were $7.4 million compared with $6.5 million reported in the third quarter of 2024. Our operating expenses in the quarter were higher than expected due to the relative weakness of the U.S. dollar, the currency in which we report versus the Israeli shekel and the Danish krone, the main currencies in which a large portion of our expenses are generated. Operating loss for the third quarter of 2025 was $2.4 million compared to an operating loss of $2.3 million as reported in the third quarter of 2024. Net loss for the quarter was $2.1 million compared to a net loss of $1.7 million in the third quarter of 2024. Loss per share in the quarter was $0.36. This is compared with a loss per share of $0.28 as reported in the third quarter of last year. Now turning to the balance sheet. As of September 30, 2025, our working capital and marketable securities amounted to $114 million, including $46 million in high-quality inventory and $76 million in cash, cash equivalents, bank deposits, and highly rated marketable securities with no debt. That ends my summary. I would like to hand back to the operator for the questions-and-answer session.

The first question is from Ryan Koontz from Needham.

Hi, this is Jeff Hopson on for Ryan Koontz from Needham. Just wanted to understand maybe more where Silicom could fit in with the ongoing AI narrative. Obviously, ASICs have a place in AI, but I would think there are also specialized situations where your guys' NICs could be utilized. So just maybe some more info on that.

Absolutely. So when we look at AI, we see opportunities in a few different product lines, maybe even all product lines to be more accurate. So on the one side, we see opportunities for our NICs, our high-speed NICs, 400-gig NICs. Those are just the right equipment you need for the inference systems as well as the training systems. So this is one area that we think could have very good potential. Another area is with the FPGA because a lot of things are not really well defined still, I would say, in AI systems, and there's a lot of proprietary communication and protocols that FPGA can bridge the gap where ASICs are not available right now and probably will not be in the foreseeable future. And the third one is also on the edge systems where we are able to see opportunities for edge inference. We actually just had a webinar together with Intel about it yesterday, showing some use cases of AI at the edge, and we feel there's opportunities with all of them. Some of those are more advanced right now. Some of them are more early exploratory, but I think we definitely have opportunities in all of them.

And then looking at the presentation, you also have some large opportunities with service providers and some telco equipment. Just curious about the spending environment in those 2 in the telecom industry, if that's getting better or if there are certain things that are pushing spending or new types of hardware there?

Yes. I mean we have discussions with both service providers as well as OEMs and enterprises. Service providers, we have like Tier 1, also Tier 2, Tier 3 service providers. Some of them are the really big telcos and some of them are smaller. We definitely see for our products, for our type of products, we see the need. Customers see the need; they actually need our products for the next generation and to support their customers. So this is something that we feel will have good opportunities. We probably will also have design wins with service providers. So we feel good about it.

There are no further questions at this time. Before I ask Mr. Eizenman to proceed with his closing statement, I want to remind everyone that a replay of this call will be available by tomorrow on Silicom's website, www.silicom-usa.com. Mr. Eizenman, would you like to make your concluding statement?

Thank you, operator. Thank you, everybody, for joining the call and for your interest in Silicom. We look forward to hosting you on our next call in 3 months. Good day.

Thank you. This concludes Silicom's Third Quarter 2025 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.