November 30, 2025 08:00 PM GMT Global Technology Humanoid Tech – Grasping the Future Transitioning to physical intelligence marks a pivotal chapter in human history. The rate of change is incredible, favoring those best able to adapt. We expect a humanoids semiconductor TAM of US$305bn by 2045, comprising key AI processors and sensors, and to delve deeper into the opportunity, we introduce our Humanoids Tech 25 list, highlighting key investment opportunities as the humanoid story evolves. Physical AI – clos ...

Core Insights - AMD's stock rose 5.7% despite a general downturn in AI stocks, showcasing resilience in a challenging market environment [1][3] - The company's strong performance at its investor day led to multiple price-target hikes and ratings upgrades from analysts, indicating positive market sentiment [2][3] - AMD is positioned for significant market share expansion in the AI GPU space and aims to compete effectively against Intel in the CPU markets for PCs and servers [3] Future Outlook - AMD's recent partnership with OpenAI is seen as a pivotal moment that could enhance its market positioning in AI processors [4] - The company's stock has appreciated 104% in 2025, driven by improving expectations in the AI sector [4] - However, analysts have noted risks related to tech licensing from Arm Holdings, Nvidia's dominance in AI GPUs, and margin pressures from costs associated with data center market competition [5]

AI Development - Malaysia unveiled its own AI processor, joining a global race [1] - The focus is on building sought-after electronic components for AI development [1]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 16% in Q1, significantly above expectations, primarily due to favorable timing of material receipts [22][24] - Adjusted EBITDA for the quarter was $82 million, representing a 17% growth year-over-year, with an adjusted EBITDA margin of 10.3%, reflecting a slight year-over-year margin expansion of 10 basis points [24][26] - First quarter net earnings were $50 million, with diluted EPS of $0.19, marking a 7273% increase, while adjusted net earnings were $54 million, with adjusted diluted EPS of $0.20, up 42% [26][30] Business Line Data and Key Metrics Changes - The Advanced Sensing and Computing (ASC) segment saw a revenue growth of 18%, while the Integrated Mission Systems (IMS) segment's revenue increased by 11% [23][24] - ASC adjusted EBITDA increased by 2%, but the margin declined by 130 basis points due to negative contract adjustments and increased costs from a sole source supplier [25][26] - IMS adjusted EBITDA rose by 38%, with margin expansion of 260 basis points, driven by favorable contract adjustments and increased volume from the Columbia Class program [25][26] Market Data and Key Metrics Changes - The company secured nearly $1 billion in bookings during the quarter, resulting in a book-to-bill ratio of 1.2, marking the thirteenth consecutive quarter with a book-to-bill above one [6][20] - The backlog increased to $8.6 billion, reflecting growth on both a year-over-year and sequential basis [7][20] - Domestic growth was highlighted, while international growth faced some headwinds due to timing of deliveries [35][36] Company Strategy and Development Direction - The company is focused on enhancing its role in national defense initiatives, particularly in layered air defense, counter UAS, and shipbuilding [11][12] - The company is investing in its Charleston facility to support shipbuilding and is exploring opportunities in electric propulsion and unmanned naval platforms [17][18] - The company is also advancing its AI capabilities to enhance threat detection and situational awareness in combat vehicles [18][19] Management's Comments on Operating Environment and Future Outlook - Management noted a dynamic operating environment but expressed confidence in maintaining a book-to-bill ratio above one for 2025 [10][11] - The global threat environment remains elevated, which is expected to sustain demand for defense spending [11][12] - The company anticipates the FY '26 President's Budget Request will provide clarity on funding allocations for key priorities [11][12] Other Important Information - The company initiated a dividend payment and stock repurchases as part of its capital return initiatives [8][20] - The company is actively engaged in M&A opportunities, viewing them as a top priority for capital allocation [78][79] - The company has implemented economic price adjustment clauses in contracts to mitigate risks associated with price volatility of raw materials [81][82] Q&A Session Summary Question: Can you talk about material receipts and international growth? - The material acceleration impacted revenue holistically across the board, with domestic growth being the primary contributor while international growth faced some headwinds [35][36] Question: What are the margin expectations for ASC? - The ASC segment is expected to have a lower gross margin prospectively, but adjustments made in Q1 should mitigate some impacts moving forward [41] Question: How do you see your share of the defense budget evolving? - The company expects to grow ahead of the defense budget, aligning with the administration's priorities in shipbuilding and force protection [56][58] Question: What is the opportunity in the European defense market? - There is a substantial near-term opportunity in areas like counter-drone systems and advanced sensing programs, although competition may evolve over time [66] Question: How is the company positioned for Navy opportunities? - The company is engaged in discussions to increase its role in shipbuilding and is positioned to support the Navy's increased throughput needs [70][71] Question: What is the outlook for interest expense? - The company anticipates a lower interest burden for the full year due to improved cash position and linearity [111]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 16% in Q1, significantly above previous expectations, primarily due to favorable timing of material receipts [22][24] - Adjusted EBITDA for the quarter was $82 million, representing a 17% increase year-over-year, with an adjusted EBITDA margin of 10.3%, reflecting a slight margin expansion of 10 basis points [24][25] - First quarter net earnings were $50 million, with diluted EPS of $0.19, marking a 7273% increase, while adjusted net earnings were $54 million, with adjusted diluted EPS of $0.20, up 42% [27][28] Business Line Data and Key Metrics Changes - The Advanced Sensing and Computing (ASC) segment saw a revenue growth of 18%, while the Integrated Mission Systems (IMS) segment's revenue increased by 11% [23][24] - ASC adjusted EBITDA increased by 2%, but the margin declined by 130 basis points due to negative contract adjustments and increased costs from a sole source supplier [25][26] - IMS adjusted EBITDA rose by 38%, with margin expansion of 260 basis points, driven by favorable contract adjustments and increased volume from the Columbia Class program [26] Market Data and Key Metrics Changes - The company secured nearly $1 billion in bookings during the quarter, resulting in a book-to-bill ratio of 1.2, marking the thirteenth consecutive quarter with a book-to-bill above one [7][8] - The backlog increased to $8.6 billion, reflecting growth on both a year-over-year and sequential basis [9] - Domestic growth was highlighted as a key driver, while international growth faced headwinds due to timing issues related to support for Ukraine [35] Company Strategy and Development Direction - The company is focused on enhancing its capabilities in layered air defense, counter UAS, and shipbuilding, aligning with national defense initiatives [12][13] - The company is investing in AI technologies and electric propulsion systems, aiming to capture significant demand in these areas [19][20] - The strategic emphasis is on maintaining a strong operational performance while navigating a dynamic operating environment [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of demand despite a more dynamic operating backdrop, with expectations for continued growth in defense spending driven by global threats [11][12] - The company anticipates a revenue range of $3.425 billion to $3.525 billion for the full year, implying a 6% to 9% year-over-year growth [29] - Management noted that the operating environment is more complex than in previous years, requiring agility to adapt to new challenges [21] Other Important Information - The company initiated a dividend payment and stock repurchase program as part of its capital return initiatives [10] - The management is actively engaged in M&A opportunities, viewing it as a top priority for capital allocation [76][77] Q&A Session Summary Question: Can you discuss the impact of material receipts on revenue? - The material acceleration impacted revenue holistically across the board, with improved supplier deliveries contributing positively [34][35] Question: What are the expectations for second half revenue? - The guidance suggests a flat to 6% growth in the second half, with continued improvements in linearity expected [38][39] Question: How will ASC margins be affected going forward? - The adjustments made in Q1 are expected to lead to a lower gross margin prospectively, but a recovery is anticipated [39] Question: What are the margin expectations for the year? - The margin is expected to improve as revenue increases, driven by operational leverage [44] Question: How is the company positioned for the upcoming defense budget? - The company is well-positioned to capture growth aligned with defense priorities, particularly in shipbuilding and force protection [55][56] Question: What is the company's approach to M&A? - The company remains focused on M&A as a priority, with a robust pipeline of strategically attractive opportunities [76][77]