Financial Data and Key Metrics Changes - Third quarter revenues reached $239 million, exceeding the midpoint of expectations and reflecting a 13% year-over-year increase [4][10] - Gross margin for Q3 was 12.1%, impacted by a one percentage point decline due to lower IMG revenue volumes [9][10] - Operating income for Q3 was $5.1 million, with net income per share at $0.07 [10] Business Line Data and Key Metrics Changes - The demand for etch and deposition applications remained strong, particularly for leading-edge investments, but there was a decline in non-semi end markets, notably in the IMG business [5][6] - IMG's business, which includes commercial space and aerospace and defense, did not recover as expected, leading to a forecast of continued lower revenue for the remainder of the year [6][12] Market Data and Key Metrics Changes - Year-to-date revenue growth of 18% was noted, driven by increased demand from the two largest customers, despite declines in EUV lithography and silicon carbide businesses [8] - The company anticipates Q4 revenues to range between $210 million and $230 million, with gross margins expected to be between 10% and 12% [12] Company Strategy and Development Direction - The company plans to realign its global footprint and cost structure to enhance long-term profitability, focusing on improving product margins across all verticals [15] - Strategic investments are aimed at transitioning products to volume and delivering new offerings to maintain a competitive edge [15][16] Management's Comments on Operating Environment and Future Outlook - Management indicated that Q4 2025 may be the trough quarter, with expectations for recovery in the first half of 2026 [25][57] - The company remains optimistic about long-term market fundamentals driven by AI, high-performance logic, and advanced packaging [15][16] Other Important Information - The company completed refinancing its credit facility, reducing borrowing costs and extending the term by five years [11] - Cash and equivalents totaled $92.5 million at the end of Q3, with $9 million generated from operations [10][11] Q&A Session Summary Question: Can you quantify the revenue shortfall from IMG in Q3? - The revenue shortfall was approximately $2.5 million, with expectations for a similar decline in Q4, stabilizing thereafter [18][19] Question: What type of optimism do you have regarding business levels improving in the first half of next year? - There is visibility for recovery into Q1, with expectations that Q4 will be the trough [25] Question: Were the Q3 pull-ins correlated with the revenue decline from the number three and four customers? - The pull-ins were largely unrelated and primarily offset the softness in IMG [34] Question: What are the specific contributors to gross margin expansion? - Continued improvements in proprietary products and rationalization of global operations are key contributors [40][41] Question: Is the aspirational goal of vertical integration driving a gross margin of 20% still in place? - Yes, that remains the long-range aspirational goal, with flow control being a significant enabler [59]