Texas Instruments Inc Q1 FY2026 Earnings Call

Welcome to the Texas Instruments Incorporated First Quarter 2026 Earnings Conference Call. I am Mike Beckman, Head of Investor Relations, and I am joined by our Chief Executive Officer, Haviv Ilan, and our Chief Financial Officer, Rafael R. Lizardi. For any of you who missed the release, you can find it on our website at ti.com/ir. This call is being broadcast live over the web and can be accessed through our website. In addition, today's call is being recorded and will be available via replay on our website. This call will include forward-looking statements that involve risks and uncertainties that could cause Texas Instruments Incorporated's results to differ materially from management's current expectations. We encourage you to review the notice regarding forward-looking statements contained in the earnings release published today as well as Texas Instruments Incorporated's most recent SEC filings for a more complete description. Today, we will provide the following updates. First, Haviv will start with a quick overview of the quarter. Next, he will provide insight into first quarter revenue results, with some details on what we are seeing with respect to our end markets. Lastly, Rafael will cover the financial results, give an update on capital management, as well as share the guidance for second quarter 2026. With that, let me turn it over to Haviv.

Thanks, Mike. Before I go into the results, I want to highlight that in the first quarter, we announced an agreement for Texas Instruments Incorporated to acquire Silicon Labs. This transaction enhances our global leadership in embedded wireless connectivity, expands Texas Instruments Incorporated's portfolio, and leverages Texas Instruments Incorporated's internally owned technology and manufacturing and reach of market channels. We expect the transaction to close in 2027 subject to necessary approval. Now let me provide a quick overview of the first quarter. Revenue was $4.8 billion, an increase of 9% sequentially and an increase of 19% year over year. Analog and Embedded both grew sequentially and year over year. Analog revenue grew 22% year over year and Embedded Processing grew 12%. Our Other segment declined 16% from the year-ago quarter. Let me provide a few comments about the current market environment. In the first quarter, revenue came in above the top of the range as we saw continued acceleration in Industrial and Data Center. The overall semiconductor market recovery is continuing, and we remain well positioned with inventory and capacity that allows us to support our customers with competitive lead times through the cycle. Now I will share some additional insights into first quarter revenue by end market. First, Industrial increased more than 30% year over year and was up more than 20% sequentially, growing broadly across all sectors and regions. Automotive increased mid-single digits year over year and was about flat sequentially. Data Center grew about 90% year over year and grew more than 25% sequentially. Personal Electronics was flat year over year and grew low single digits sequentially. And lastly, Communications Equipment grew about 25% year over year and grew more than 30% sequentially. With that, let me turn it over to Rafael to review profitability and capital management.

Thanks, Haviv, and good afternoon, everyone. As Haviv mentioned, first quarter revenue was $4.8 billion. Gross profit in the quarter was $2.8 billion, or 58% of revenue. Sequentially, gross profit margin increased 210 basis points. Operating expenses in the quarter were $974 million, about as expected. On a trailing twelve-month basis, operating expenses were $3.9 billion, or 21% of revenue. Operating profit was $1.8 billion in the quarter, or 37% of revenue, and was up 37% from the year-ago quarter. Net income in the quarter was $1.5 billion, or $1.68 per share. Earnings per share included a $0.05 benefit for items not in our original guidance, primarily due to discrete tax benefits. Let me now comment on our capital management results. Starting with our cash generation, cash flow from operations was $1.5 billion in the quarter, and $7.8 billion on a trailing twelve-month basis. Capital expenditures were $676 million in the quarter and $4.1 billion over the last twelve months. Free cash flow on a trailing twelve-month basis was $4.4 billion, up from $1.7 billion in 2025, trending up as growth returns and CapEx begins to moderate. Free cash flow in the trailing twelve months includes $965 million of CHIPS Act incentives. This includes a $555 million payment received in the first quarter as part of our direct funding agreement related to the start of production at our newest 300-millimeter wafer fab in Sherman, Texas. In the quarter, we paid $1.3 billion in dividends and repurchased $158 million of our stock. In total, we returned $6 billion to our owners in the past twelve months. Our balance sheet remains strong with $5.1 billion of cash and short-term investments at the end of the first quarter. Total debt outstanding is $14 billion with a weighted average coupon of 4%. Inventory at the end of the quarter was $4.7 billion, down $109 million from the prior quarter, and days were 209, down thirteen days sequentially. Turning to our outlook for the second quarter, we expect Texas Instruments Incorporated's revenue in the range of $5.0 billion to $5.4 billion and earnings per share to be in the range of $1.77 to $2.05. We expect our effective tax rate to be about 13% in the second quarter. In closing, we will stay focused in the areas that add value in the long term. We continue to invest in our competitive advantages, which are manufacturing and technology, a broad product portfolio, reach of our channels, and diverse and long-lived positions. We will continue to strengthen these advantages through disciplined capital allocation and by focusing on the best opportunities, which we believe will enable us to continue to deliver free cash flow per share growth over the long term. With that, let me turn it back to Mike.

Operator, you can now open the line for questions. In order to provide as many of you as possible an opportunity to ask your questions, please limit yourself to a single question. After our response, we will provide you an opportunity for an additional follow-up. Operator?

Thank you. We will now be conducting a question-and-answer session. You may press 2 to remove your question from the queue. For participants using speaker equipment, please pick up your handset before pressing the keys. Please hold for a moment while we poll for questions. Our first question is from Timothy Arcuri with UBS.

Thanks a lot. Haviv, I wonder if you can comment on the behavior of customers. I know you are guiding up a little better than seasonal off of a number in March that was very strong. So it sounds like it is mostly Industrial, but can you comment on whether there are rush orders? We are seeing signs of price increases and things like that. So is this impacting the customers' behavior? Thanks.

Yeah, thanks, Tim. In general, Q1 was a continuation of what we saw in Q4, similar behavior, meaning growth coming from two main areas, led by Industrial, as you mentioned, and also supported by the Data Center market that we have seen secular growth in for the last couple of years. This was the eighth quarter of sequential growth, just off of a higher number, so that also helps the overall growth of the company. The Industrial signal was broader this time; all sectors and all geographies grew sequentially, and it continued to accelerate through the quarter. If you think about January, February, and then the exit from the Lunar or the Chinese New Year break, it continued in March. So just a continuation. It is our five or six months of continued growth in Industrial. We want to keep watching it, but that is what guides our forecast into the second quarter. Mike, anything to add on that?

I think on behavior, just want to be mindful of the overall macro backdrop and want to see how sustainable the growth is, and that was factored into the guide. Tim, do you have a follow-up?

I do. Mike, maybe you can comment on, I know typically you do not break the guidance down by segment, but just given how different it was in March, and given that we are hearing some choppiness in Autos, particularly in China, I would think that most of the sequential growth will be Industrial, but can you give any comments for what is being thought of in the June guidance for those two?

Let me take that, Tim. I think I can help you a little bit on the Automotive side. First, we are not seeing a change from the previous quarter, so I expect growth to be led by Industrial and Data Center. I will not break it out between the two, but we see strength in both. Regarding Automotive, you are right that Q1 was always the same in Q1 in China. The overall quarter was flat sequentially, but China was down while the rest of the world was up. I want to see Automotive and see how it develops in Q2. It is too soon to call it. I will remind that during the COVID cycle, Automotive was the last to join in and also the last to peak. So I am not surprised by the behavior of this market. Secular growth in Automotive continues for the foreseeable future, and that is what gives me encouragement. We are seeing cars adding features and more content added to vehicles across the powertrain, whether it is BEV, ICE, or hybrid. Anything to add on that, Mike, in terms of the guide?

No, I think you have characterized it well. And as you know, Auto has been steady at an elevated level for some time. It did not really have that steep correction that we saw in the other end market. So as we have called out, these markets in the past have been transitioning out of phase. I do not think it is unrealistic to assume that could happen again. So we will have to see how it plays out.

It is an important point. Q1 was a flat quarter, but very close to peak levels, maybe a point or two below its peak. So it is holding very nicely at a high level.

Alright. We will move on to our next caller.

Thank you. Our next question is from Vivek Arya with Bank of America.

Thanks for taking my question. On this Industrial growth, up 30% year over year, this is obviously well above the long-term trend line. Could you help us dissect which applications, which end markets are driving this? Is this still inventory replenishment? Is this pricing? Is it share gains? What checks and balances do you have in place that this is not any kind of double ordering or hoarding of your product?

I do not see it as double ordering or hoarding, at least I do not have the evidence to show that. For one quarter that is a lot of growth. If you look at the long-term trend line, we are still below the trend line. I did the math for Q1: Industrial had a very good quarter growing at the rate you mentioned, but it is still 15% lower than the peak back in 2022. There is secular growth continuing in Industrial, so we deserve a higher peak four years later. I think there is a lot of room to grow. The encouragement this time is that I see it at a broader application level. Not only the data-center-related energy infrastructure or power delivery, not only Aerospace and Defense—given the geopolitical tensions the market is establishing new peaks every quarter—I saw it across all sectors in Industrial and across all customers in terms of regions and customer sizes. It is the first quarter where we saw the broad market, typically the tail, starting to wake up again after a long hibernation period. So I am encouraged about the growth, and I think there is room to go. I would like to see secular growth in Industrial continue and then higher peaks established in 2026 or later versus the 2022 peak. Trend lines suggest we still have room to go.

Thank you, Mike. So last year, we saw the overall Analog industry do very well in the first half, and then there was some level of deceleration in the second half. I realize every year is different. I know you are not guiding to the second half. But from what you see today, what are the puts and takes as you look at the second half versus the first half? Is there anything that could be different just given all the macro trends, memory price inflation, and whatnot? And as part of that, if Rafael could also help chime in with how you are managing fab loadings as you look towards the rest of the year.

Vivek, you are spot on. We had a similar strong beginning of the year last year. It looked like it was getting stronger, but then it took a breather. We had a good year in Analog, but it did not accelerate in the second half. We need to be mindful. There is geopolitics and macro to watch. On the other hand, there is secular growth in our markets. In the long term, I am still very optimistic. We want to play it quarter by quarter. That is part of how we guided to $5.2 billion at the midpoint. Let the second quarter play out, and we will call it as we see it. We serve our customers direct and see demand build-up almost in real time. I want to see the second quarter play out and see if growth is sustainable. That is the biggest question for the second half. At least the fact that Industrial is still trending below previous peaks, secular growth in Data Center, and content growth in Automotive gives me encouragement. Rafael, can you comment about loading?

I will just add that we have the capacity and the inventory, and we are well positioned on both of those to handle a wide range of scenarios in the upturn.

Alright. Vivek, thank you so much for the questions. I will move on to our next caller.

Our next question is from Joe Moore with Morgan Stanley.

Great, thank you. Yes, on the topic of fab loading, can you talk about what is going to happen with inventory over the course of Q2? And are you seeing incremental gross margins off of Q1 that are better than normal, worse than normal, or just normal? What are the dynamics around that transition?

We are well positioned on inventory. The objective of inventory is to maintain high levels of customer service, keep lead times short and stable, and we are accomplishing that. We feel very good as to where those are, and we will continue to determine what makes sense from a loadings and inventory standpoint throughout the quarter to handle any scenarios.

Joe, you and I talked a month ago; we saw rapid growth in Q1 and inventory served us well. We depleted some of it and filled our customers in real time according to their demand. We want to see how sustainable that is. As Rafael said, if the market wants very rapid growth and maybe catch up to the trend line even quicker, we are well positioned. We are in phase three on the fab and can modulate wafer starts there. We have the capacity. We may make some incremental investments on the assembly and test side because we are seeing a tighter environment externally. We have brought most of our supply internally and have that control as well. We are prepared. If the market wants to grow at the same rate as Q1—19% year over year—we are ready. If it wants to accelerate, we are ready as well.

Joe, do you have a follow-up? Joe, do you have a follow-up?

Well, just on my follow-up, on the gross margin aspect of that. Is the incremental gross margin going to look normal, or is there some part of inventory management that makes it lesser or more?

The fall-through you should expect is in the 75% to 85% that we have guided. That excludes depreciation over a long term. On a year-on-year basis, if you look at our midpoint on EPS and revenue and make the right assumptions on OpEx and other lines, you should get to a reasonable assumption on gross margins, and it will be in that fall-through range that we have guided.

Thank you. Moving on to our next caller. Our next question is from Stacy Rasgon with Bernstein Research.

Hi, guys. Thanks for taking my question. Maybe just to dig into that gross margin point, if I typically think of your OpEx up, what, a couple of points in Q2, I come out with a gross margin implicit in the guidance maybe low to mid 59%, up from 58%. And it is up, I do not know, 100 or 150 bps year over year on a pretty material revenue growth. Part of me would almost expect the incremental gross margin to be higher given the revenue. But maybe it is differential, like the increase in depreciation. How should I be thinking about the different drivers of gross margin into Q2? Qualitatively, if not quantitatively, if you do not want to give us a quantitative?

Stacy, to help you out a little bit, your OpEx assumption was not a bad one. You should expect some growth in OpEx from Q1 to Q2. Maybe what you are missing is the acquisition charges line. You should expect to continue to have charges there every quarter at the level we just reported in first quarter. We will continue having those each quarter until we close, at which time it will be a lot higher at close, and then they will be steady after that for a number of years. For now, for second quarter, just assume somewhere in the range of what we reported on the acquisition line. When you do that, you will get a gross margin assumption that should make sense.

Alright. Do you have a follow-up, Stacy?

Thanks. Maybe to ask about the acquisition itself. Again, not the deal specifics, but I know you have talked about it being accretive. You are one of the few, if not the only company in my coverage that still does pure GAAP earnings. And I even remember when you bought Nat Semi, you did pro forma for a little while and then said this is stupid, we are going back to GAAP, and told us to make whatever adjustments we want to make. What are your intentions for how you are going to report once you do close Silicon Labs? Because I have a hard time getting it accretive on a GAAP basis. Are you going to be going to a pro forma, or how should we be thinking about that?

Our thinking right now is we will do GAAP, and we will give you all the pieces that you need to do your own non-GAAP in whichever way you want to do that. So we will have the acquisition charges line, for example. You can take that out if you like and not count it. Once we are on a run-rate basis, all those will be noncash. But initially, some of those are cash charges. They are charges to advisors: bankers, lawyers, regulatory fees, etc. There will be other things. For example, the first quarter will have some transition impacts in gross margins and inventory as we write off the inventory that we are buying. We will give you all those pieces so you can do the non-GAAP analysis yourself.

Thanks for the question. Moving on to our next caller, please. Our next question is from Ross Seymore with Deutsche Bank.

Hi, guys. Thanks. Let me ask a couple of questions. I guess the first one is the strength that you saw—what was the biggest surprise versus the midpoint of your guide in the first quarter? And was pricing part of the strength in either the quarter or the guide?

Let me start with pricing and then discuss the quarter. In terms of pricing, we said in the last quarter we did not expect pricing to help growth, at least not sequentially or year over year, and that was the case. Usually, Q1 pricing is a couple of points down year over year and sequentially because price agreements typically kick in at the beginning of the year. This quarter behaved a little better. Pricing was stable, flat like-for-like both sequentially and year over year. That helped a little bit. I expect Q2 to be very similar. If demand continues to be strong and we see an average price increase across the Analog market, it is likely that prices may go up in the second half of the year. This will be a case-by-case discussion. The pricing environment depends on supply and demand, and the unknown right now is the sustainability of demand. I want to see it play out one more quarter and then we will figure out the second half. High level, not immediate support on sequential or year-over-year pricing. What we have seen is breadth of demand—multiple sectors, all regions, all types of customers, small and large—and support from Data Center where we do well. Our portfolio is growing and we are fulfilling customer demands at the highest level. We have no shortages, and that allows us, over time, to take market share. That drove Q1. I expect similar behavior in Q2, and the second half is still unknown. Our application-specific sockets are seeing momentum in design-ins and I expect them to kick in more in the second half and into 2027. My expectations are high.

Do you have a follow-up, Ross?

Yeah, I do. One of the concerns people have, and it does not sound in the strong report and guide that you are seeing it, but one of the concerns people had was more consumer-oriented end markets seeing demand destruction with higher memory costs, memory availability, those sorts of things. Are you seeing any evidence of that? Your Personal Electronics segment seemed like it was better than normal seasonal in the first quarter. I suspect that is where it would arise if it were to arise. So I just wondered if you have seen any evidence of that across your business.

High level, we have not seen evidence of that, although customers are aware of the dynamics and are preparing. I will let Mike comment about the Personal Electronics market.

I think it is also important to remember that fourth quarter last year was a pretty easy compare for the sequential transition for Personal Electronics. On a year-on-year basis, it is about flat. So if that was happening, you cannot point to those results as evidence of that. You cannot rule it out, but we will move on to our next caller. Thank you, Ross.

Our next question is from Tore Svanberg with Stifel.

Yes, thank you and congrats on the strong results. Haviv, I was hoping to zoom in on Data Center and specifically Power. It is a great market and great opportunity. It is also very competitive. I am wondering if you could talk a little more about some of the moats here as we go into the next few years that Texas Instruments Incorporated has. I assume your manufacturing footprint will be an important element of that, but any other color you could add on Texas Instruments Incorporated's positioning in power semis, especially with Data Center over the next few years?

Power is very important to Data Centers, specifically power density. The amount of power you need to drive into these systems requires silicon that can withstand it, so power electronics matter. Texas Instruments Incorporated is well positioned. In Data Center there is attention to application-specific sockets—stage one, stage two, the VRM, the last VCORE that GPUs need for power delivery at the highest level—very complex parts, multiphase power delivery. There is also a lot of general-purpose parts in a rack with tens of thousands of them, lots of different SKUs, and our general-purpose portfolio is well suited to fulfill almost every Analog socket on these racks. We are unique in that way because of the breadth of the portfolio and our ability to supply. We have seen cases where customers needed help due to shortages from other suppliers, and we come in and solve the problem. That is part of the reason our growth has been so high—90% year over year—and I am excited about the future. We are investing more R&D in Data Center and will be a competitor on application-specific sockets, whether VRM stage two or high-voltage conversion, and we are well positioned there with GaN technologies and advanced BCD nodes built in North America. Customers care about that. The combination of a broad portfolio, ability to support the rack and the board, ability to supply at scale, and a geopolitically dependable location is unique and not easy to replicate. I am encouraged about our opportunity to continue growing in this market and expect design-in momentum to convert into more wins in the second half and 2027.

Thanks. Tore, do you have a follow-up?

Yeah, that is great color. Thank you, Haviv. As my follow-up, thinking about another new upcycle in Analog and comparing this to the last one. In the last one, capacity got tight pretty quickly. Lead times started extending quickly. Now that you have made CapEx investments and have the big manufacturing footprint, are you starting to see share gains pop up in your design wins since you are much better positioned with capacity now versus back then?

I believe we are gaining share. We gained share in Analog in 2025, and I think we have a lot of room to go. We are still below previous peaks. The question is whether demand continues or it will take more time. We hope demand continues. We have the answer for customers and in many cases are unique. Availability is allowing us to win back market share. Pricing is competitive and we have opportunity in the second half. It all depends on sustainability of demand. If it continues, our opportunity grows.

I will add that we spent the last several years preparing with capacity and inventory, and our lead times have been stable over the last several months. We are happy with the delivery performance and the systems in place to support customers' needs and growth. Alright. I will move on to our next caller. Thanks.

Our next question is from an analyst with Cantor Fitzgerald.

Guys, thanks for taking the question. You previously talked about spending about $2 billion to $3 billion CapEx in 2026. First, is that still the right number? And then as we think about the modular buildouts within this ongoing recovery, can you help walk us through when you would need to start to add the incremental equipment and how you are thinking strategically about your capacity today, as we are starting to see some foundry capacity at custom mature nodes and now tier-two foundry pricing increases?

Yes. The answer is yes. We are looking at $2 billion to $3 billion of CapEx for this year. In that number, there is capacity for what we call phase three, which is incremental capacity on the fab side and on the assembly and test side. A growing proportion of our CapEx is going to assembly and test to address growth. Beyond 2026, think of the 1.2 times rate for the long-term CapEx intensity. For example, if you take 5% growth, that would translate into 6% CapEx as a percent of revenue, and that is how you would want to model it.

Matthew, just one more point. The $2 billion to $3 billion is valid. We gave a framework on revenue scenarios and CapEx that remains valid. As Rafael said, we are seeing at the midpoint of Q2 about 17% to 18% growth year over year for the first half. We want to be prepared if it continues. We are supporting a range of scenarios. We have enough wafer capacity with our 300-millimeter wafer fabs and installed equipment, but on the assembly-test side there is an opportunity. We are happy we internalized our supply because we are seeing bottlenecks pop up. Controlling our back end lets us move more stuff internally. Some of the $2 billion to $3 billion is supporting faster internalization of our back end into our own assembly and test, which allows us to support customers at a higher level.

Do you have a follow-up, Matt?

Yeah, that is helpful. I guess as a follow-up, is there any update to your messaging around depreciation expectations versus three months ago? Then maybe how to think about timing of when Texas Instruments Incorporated will receive the remaining CHIPS Act direct funding? Thanks.

No change to depreciation. The expectation for this year is $2.2 billion to $2.4 billion. For 2027, continued upward pressure, but likely at a slower rate. On the CHIPS Act, the ITC is the more interesting one long term—that is 35% of qualified manufacturing investment. We have been getting that ITC and will continue to get ITC. On the direct funding, we have received over $500 million. In total, what we received in fourth quarter and first quarter is $630 million out of the up to $1.6 billion of direct funding. The remaining should come over the coming years as we continue fulfilling the various milestones stipulated in the contract.

Thanks, Matt. Move on to our next caller, please.

Our next question is from an analyst with Wells Fargo.

Yes, thanks for taking the question. I was curious if you could help us understand, given the resegmentation of revenue especially on the Industrial side, what is normal seasonality now for June?

You could look back and model out what our revenue has done over history. I do not have a by-end-market specific percentage, but overall, what you will typically see is the second and third quarters are stronger, and the fourth and first are typically lower compared to second and third. A follow-up?

On seasonality, our guide is slightly above seasonal. We have guided about 8% sequential, which is a little above typical seasonality. The combination of the market is changing—Data Center is a bigger part of our revenue—but overall Q2 is a slightly above seasonal guide.

As a follow-up, you had a really strong quarter in the first quarter out of the gate for free cash flow and cash flow from operations. Any update on how to think about free cash flow per share for this year? Any change there?

I mentioned during the Capital Management call that as long as revenue is growing mid- to high-single digits, $8 free cash flow per share is highly probable. First half of the year at the midpoint is between 15% to 20% growth, so there is upside. I am not going to give a specific updated number now, but go back to our Capital Management framework. At $20 billion revenue we had $8 to $9, and at $22 billion we had $9 to $10, which shows how each extra billion of revenue helps free cash flow per share. Assuming we do not have another false start, it is very likely we will be at $8 free cash flow per share for 2026. The probability is high, but we need to see how the year continues.

Thank you. Move on to our last caller.

Our last question is from Chris Caso with Wolfe Research.

Yes, thank you. First question will be about fab loading. Given what appears to be a strong start to the year, what are your plans for fab loadings, and what do you expect to do with inventory as we go through the year? I know you have been building inventory in order to be responsive to customers. Do you expect to keep inventories at these levels, or let that dip a bit?

We feel very comfortable with our position with both capacity and inventory. Inventory is there to support customer satisfaction and keep lead times short and stable. We will continue to do that and adjust loadings throughout the quarter to handle whatever comes at us in various scenarios during this upturn.

We discussed phases of our investment—phase one, phase two, phase three. The surge of demand is in Analog, and we are at phase three. We are modulating starts and have the capacity. We monitor daily consumption and decide wafer starts accordingly. Some parts take three months, others six to nine months to build, which is why we have inventory. Inventory allows a quick surge of customer support if they have strong demand. That is what happened in Q1. We guide Q2 slightly above seasonal at the midpoint, and inventory will play a role. The machine catches up. These questions relate to what demand does in the second half. Based on macro environment and last year's behavior, I want to see it play out. The good news is we are prepared for every scenario presented to us.

Taking a longer view, when you think of our range of inventory days—150 to 250—during an upturn we should be draining that number. Right now we are at 209; it should drift towards the lower end. During a downturn, we build inventory and it moves upward. In an ideal scenario, that is what you would see in terms of days of inventory.

I do. For my follow-up, I want to return to some of your comments about pricing. We have heard from others in the space who were a little more explicit on what they were doing with pricing. Is Texas Instruments Incorporated simply following the market right now with your comments of potentially some better pricing in the second half? And then as a follow-on to that, to what extent are your customers on annual price contracts such that if there was a reset in pricing, that would more likely happen toward the end of the year into next year?

Good question. Texas Instruments follows the market and we want to see sustainability; we do not want to change prices every quarter. Prices go up and down each quarter depending on portfolio, customer demand, and supply. In 2025 our pricing was down a low single-digit number. In 2026 it was stable, and it was a good start to the year. If demand continues and we see stronger requests from customers, that opens up a discussion and we are having those conversations now. Price agreements we did last year are being revisited. We will need to invest in capacity, particularly back-end, to support growth. There is tightness in the outsourced world, so there are discussions with customers. Customers prioritize parts continuity over a small price delta. They need high levels of customer support to avoid production stops, and that is what we offer. The opportunity in 2026 depends on demand sustainability. We are discussing with customers and will report back during the July call.

Thanks, Chris. Haviv, do you want to close us out?

Yes. Let me wrap up. At our core, we are engineers, and technology is the foundation of our company. Ultimately, our objective and the best metric to measure progress and generate value to owners is the long-term growth of free cash flow per share. Thank you all, and have a good evening.

This concludes today's conference. You may disconnect your lines at this time. Thank you again for your participation.