Financial Data and Key Metrics Changes - The company reported solid revenue of $2,040 million for Q3 FY2025, representing a 10.9% year-over-year increase [10][12] - Non-GAAP diluted earnings per share (EPS) was $1.53, a 22.8% increase compared to the same period last year [15] - Non-GAAP gross margin improved to 9.1%, reflecting a 60 basis point improvement year-over-year [13][14] - Non-GAAP operating income was $115.7 million, or 5.7% of revenue, showing a 40 basis point improvement year-over-year [14] Business Line Data and Key Metrics Changes - IMS revenue reached $1,650 million, up 11.6% year-over-year, driven by growth in communications networks and cloud infrastructure [16] - CPS revenue was $422 million, an 8.8% increase year-over-year, with non-GAAP gross margin at 14.7%, a 320 basis point improvement [17] - DPS non-GAAP gross margin was 14.7%, driven by higher revenue and operational efficiencies [17] Market Data and Key Metrics Changes - The communications networks and cloud infrastructure segments showed strong demand, with revenue of $786 million, a 19.1% increase year-over-year [32] - The industrial, energy, medical, defense, aerospace, and automotive segments generated $1,256 million, growing 6.2% year-over-year [31] - The company reported a solid demand pipeline across all end markets, indicating positive trends for FY2025 and beyond [33] Company Strategy and Development Direction - The company is focused on improving operating margins to exceed 6% in the long term [30] - A strategic acquisition of ZT Systems is expected to double net revenue within three years and enhance capabilities in data center and AI infrastructure [25][38] - The company aims to maintain a strong balance sheet while investing in growth opportunities and enhancing operational efficiencies [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving solid revenue and profitability growth despite uncertainties related to tariffs and geopolitical issues [24][36] - The company anticipates a growth rate of 6% to 8% for FY2025, with expectations for continued growth in FY2026 [37][64] - Management noted that customer forecasts are positive, indicating a stable business environment moving forward [62] Other Important Information - Cash and cash equivalents were reported at $798 million, with no outstanding borrowings, providing substantial liquidity of approximately $1.7 billion [19] - The company generated strong cash flow from operations of $422 million for the nine months of FY2025 [20] - Capital expenditures for the quarter were $33 million, with expectations to remain around 1.8% of revenue for the full year [21] Q&A Session Summary Question: Update on ZT Systems acquisition and revenue expectations - Management remains excited about the ZT Systems acquisition, expecting a revenue run rate of $5 billion to $6 billion, with plans to turn the business around and expand sales efforts [46][56] Question: Concerns about revenue growth in Q4 - Management acknowledged that Q4 growth may appear slower but emphasized that the business is stable and expanding, with positive customer forecasts [59][62] Question: CPS margins and future expectations - CPS margins improved due to business mix, with expectations to continue driving margin improvements above 15% [65][67] Question: Risks associated with inventory in the ZT deal - Management confirmed that they are evaluating inventory risks as part of the acquisition, ensuring it aligns with customer demand [73][75] Question: Impact of tariffs on business - Management noted that while tariffs present challenges, they are working closely with customers to navigate these issues and maintain stability in current programs [94][96]