Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $133.3 million, representing a 7.6% increase from Q2 and a 4.9% increase year-over-year, marking the highest revenue in five quarters [6][11][12] - Q4 revenue guidance is set at $143 million at the midpoint, indicating a 22% year-on-year growth, the largest increase in nearly two years [7][16] - Gross margin expanded by 20 basis points quarter-over-quarter and 50 basis points year-over-year to 69.5% on a non-GAAP basis [11][12] - Non-GAAP EPS for Q3 was $0.28, reflecting a 17% growth both year-over-year and quarter-over-quarter [12][13] Business Line Data and Key Metrics Changes - Communications and computing revenue grew 21% year-over-year and 8% sequentially, driven by increased use cases in general-purpose and AI-optimized servers [7][11] - The industrial and automotive segment saw a 6% sequential increase, with growth tempered by strategic shipping to normalize channel inventory [7][8] Market Data and Key Metrics Changes - The communications and computing segment is expected to account for over 55% of total revenue in 2025, growing to about 60% in 2026 [21] - The company is experiencing strong growth in the China automotive market, while aerospace and defense applications are also performing well globally [24] Company Strategy and Development Direction - The company is focused on capitalizing on investments in AI and data center infrastructure, with a robust innovation pipeline and increasing design wins [5][6] - The strategy includes normalizing channel inventory by year-end 2025, positioning for renewed growth into 2026 [8][15] - The company aims to deliver above-average revenue growth, supported by expanding addressable markets and increasing average selling prices from new products [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory, citing strong bookings and a favorable outlook for 2026 driven by the communications and computing segment [6][21] - The company noted that macroeconomic conditions could impact growth, but several factors are fueling confidence, including increased infrastructure capital expenditures [8][9] Other Important Information - The company remains debt-free and has repurchased approximately $15 million of common stock during the quarter, with a total of $86 million repurchased in the first nine months of 2025 [15] - The company expects to continue generating strong free cash flow while strategically investing in capital expenditures [13][15] Q&A Session Summary Question: Is the increased confidence in the outlook for 2026 contingent on the expected normalization in industrial and auto channel inventory? - Management indicated that the growth in communications and computing is expected to accelerate further into 2026, independent of industrial and automotive inventory normalization [21][23] Question: Can you discuss regional performance in the industrial and automotive segment? - Management noted strong performance in the China automotive market and increasing design wins in aerospace and defense globally [24] Question: What has changed in the last 90 days to increase confidence? - A successful Open Compute Summit led to increased activity and spending, with forecasts for hyperscalers being raised [28][29] Question: How is the Avant platform performing? - Both Nexus and Avant platforms are performing well, with expectations for significant growth in 2026 and 2027 [32][43] Question: What is the current view on the automotive market? - Management is seeing inventories come down and is optimistic about the automotive market's recovery [112]