Financial Data and Key Metrics Changes - Revenue for the second quarter reached a record $1.13 billion, representing a 36% increase year-over-year and a 16% increase from the prior quarter [5][10] - Non-GAAP EPS was $3.36, exceeding guidance despite a $3 million foreign exchange revaluation loss [10][12] - Gross margin improved to 12.4%, a 10 basis point increase from Q1, while operating margin reached 10.9%, up 30 basis points from both Q1 and the previous year [12] Business Line Data and Key Metrics Changes - Optical Communications revenue grew 29% year-over-year and 11% sequentially, totaling $833 million [10][12] - Telecom revenue surged 59% year-over-year and 17% from Q1, reaching $554 million, with DCI revenue increasing 42% year-over-year [5][10] - Non-Optical Communications revenue was $300 million, up 61% year-over-year and 30% from Q1, driven by high-performance computing products [11][12] Market Data and Key Metrics Changes - Demand in the telecom sector remains strong, particularly in DCI modules and Datacom, with expectations for continued growth [8][10] - Automotive revenue grew 12% year-over-year but saw a slight decline from Q1, while industrial laser revenue increased 10% year-over-year [7][12] Company Strategy and Development Direction - The company is focused on strategic capacity expansion, with the construction of a new 2,000,000 sq ft facility on track for completion by the end of 2026 [8][9] - Continued investment in high-performance computing and co-packaged optics is expected to drive future growth [22][47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth trends across all major business areas, with expectations for continued strong performance in Q3 [9][15] - The company anticipates revenue growth in telecom, Datacom, and HPC, while expecting a modest decline in automotive revenue [15][92] Other Important Information - The company ended the quarter with cash and short-term investments of $961 million, with capital expenditures of $52 million reflecting ongoing capacity enhancements [13][14] - A share repurchase program remains active, with $169 million available under the program [14] Q&A Session Summary Question: HPC customer ramp and production lines - Management indicated they are a little more than halfway to fully ramped volume, expecting revenue from the HPC program to exceed $150 million when fully ramped [18][19] Question: Co-packaged optics and optical circuit switches - Management is working on co-packaged optics programs with three different customers and sees significant potential in optical circuit switches [22][25] Question: Supply constraints on Datacom transceivers - Management confirmed they have been supply-constrained but are making progress with a second source for lasers, which should alleviate some constraints [30][32] Question: Telecom revenue growth and satellite communications - Management noted that growth in telecom was primarily driven by DCI, with optimism about both satellite communications and DCI business [34][40] Question: New customer opportunities in telecom - Management is pursuing both existing and new customers, emphasizing their role as a pure contract manufacturer without competing products [46][47] Question: Timeline for transceiver designs for hyperscalers - Management indicated they are quarters away from meaningful revenue from new transceiver designs, having worked on them for over 18 months [49][50] Question: Currency impact on EPS - Management expects similar foreign exchange headwinds in Q3, with a projected 20-30 basis point impact on gross margin [58][60] Question: Capacity additions and Pinehurst campus - Management confirmed that the Pinehurst campus is converting office space into manufacturing space, adding about 120,000 sq ft of capacity [93][94]