Financial Data and Key Metrics Changes - 2025 was a record year for sales, EPS, and free cash flow, each growing at or above 30% [5][19] - Fourth quarter sales increased by 42% and 24% organically, with adjusted EPS growing by 53% [8][14] - Free cash flow for the quarter was $189 million, up 26% year-over-year, and for the full year, it reached $561 million, growing 31% [7][19] Business Line Data and Key Metrics Changes - Infrastructure sales grew over 50%, driven by data centers, while industrial sales grew high single digits and commercial residential sales were up low single digits [9][17] - Systems Protection segment sales increased by 58%, with organic growth of 34% [17] - Electrical Connections segment sales rose by 15%, with organic sales up 8% [18] Market Data and Key Metrics Changes - Americas sales grew approximately 30%, while Europe was up high single digits; Asia Pacific saw a decline [9] - The backlog at the end of the year was $2.3 billion, triple the amount from a year ago, indicating strong demand [6][44] Company Strategy and Development Direction - The company transformed its portfolio by divesting the thermal management business and acquiring EPG, increasing exposure to the high-growth infrastructure vertical [5][11] - Infrastructure is expected to grow at approximately 20% in 2026, driven by AI data center CapEx acceleration [12] - The company plans to invest in new products, capacity, and supply chain resiliency, with a focus on growth [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving another record year in 2026, with guidance for reported sales growth of 15%-18% and adjusted EPS growth of 20%-24% [7][22] - The company anticipates higher inflation in 2026 but plans to offset it through productivity and pricing strategies [32][46] Other Important Information - The company launched 86 new products in 2025, contributing approximately 10 points to sales growth [9] - The company received multiple awards for its ethical practices and sustainability efforts, including recognition as one of the world's most ethical companies [26] Q&A Session Summary Question: Impact of inflation and growth investments on 2026 guidance - Management expects higher inflation in 2026 due to labor and metals, with plans to address it through productivity and pricing [32] Question: Customer reception to new liquid cooling products - Customer reception has been strong for new modular liquid cooling products showcased at Supercomputing [36] Question: Backlog recognition profile and orders-to-sales cadence - Most of the backlog is expected to be recognized in 2026, with strong momentum carried into the year [43][44] Question: Operating margins and pricing dynamics - Management expects margin expansion in 2026, with pricing and productivity offsetting inflation [46] Question: Trends in industrial orders and growth visibility - Industrial orders are expected to grow mid-single digits, supported by investments in CapEx and automation [75] Question: Data center technology evolution and competition - The company has significant experience in liquid cooling and is well-positioned to meet growing demand [78]

Financial Data and Key Metrics Changes - 2025 was a record year for sales, EPS, and free cash flow, each growing at or above 30% [5][19] - Fourth quarter sales were up 42% and 24% organically, with adjusted EPS growing 53% [8][14] - Free cash flow was $189 million in Q4, up 26% year-over-year, and full-year free cash flow reached $561 million, growing 31% [7][19] Business Line Data and Key Metrics Changes - Infrastructure sales grew over 50%, driven by data centers, which represented approximately $1 billion in 2025 [5][9] - Systems protection sales increased 58%, with organic growth of 34% [17] - Electrical connections sales grew 15%, with organic sales up 8% [18] Market Data and Key Metrics Changes - Americas sales grew approximately 30%, while Europe was up high single digits; Asia Pacific saw a decline [9] - The backlog at the end of the year was $2.3 billion, triple the amount from the previous year [6][44] Company Strategy and Development Direction - The company transformed its portfolio by divesting the thermal management business and acquiring EPG, increasing exposure to the high-growth infrastructure vertical [5][11] - The infrastructure vertical is expected to grow at approximately 20% in 2026, driven by AI data center CapEx acceleration [12] - The company plans to invest in new products, capacity, and supply chain resiliency, with a focus on growth [20][21] Management's Comments on Operating Environment and Future Outlook - Management expects another year of record performance in 2026, with reported sales growth of 15%-18% and adjusted EPS growth of 20%-24% [7][22] - Inflation is anticipated to impact margins, but price and productivity are expected to offset these effects [32][46] - The company is confident in its growth trajectory and the strength of its backlog, which supports its guidance for the year [44][110] Other Important Information - The company launched 86 new products in 2025, contributing approximately 10 points to sales growth [9][10] - The company received multiple awards for its ethical practices and sustainability efforts [26] Q&A Session Summary Question: Impact of inflation and growth investments on 2026 guidance - Management expects higher inflation in 2026 but plans to address it through strong productivity and pricing [32] Question: Customer reception to new liquid cooling products - Customer reception has been strong, with new products expected to contribute to growth in 2026 [36] Question: Backlog recognition profile and order trends - The backlog is primarily in data centers and power utilities, with most expected to be recognized in 2026 [43][44] Question: Operating margins and pricing dynamics - Management expects margin expansion in 2026, with pricing and productivity offsetting inflation [46] Question: Trends in industrial orders and growth visibility - Industrial orders are expected to grow mid-single digits, supported by investments in CapEx and automation [75] Question: Liquid cooling market potential and competition - Liquid cooling is expected to grow significantly, with less than 30% of data centers currently utilizing it [63][78] Question: M&A pipeline and activity - The company has a strong M&A pipeline and remains disciplined in pursuing new acquisitions [99]

Core Viewpoint - SAIHEAT Limited has received a BUY rating from uSmart Securities, with a price target raised to $31.32 from $25.87, driven by advancements in nuclear technology, favorable U.S. policies, and increasing demand for AI and cryptocurrency infrastructure [1][8]. Group 1: Key Drivers for Valuation Upgrade - **SMR Patent Achievement**: SAIHEAT obtained patent approval for its small modular reactors (SMRs) control rod drive mechanism on May 14, 2025, enhancing precision and safety in nuclear systems and strengthening its intellectual property [3]. - **U.S. Nuclear Policy Reforms**: Recent executive orders from President Trump on May 24, 2025, simplified nuclear licensing and prioritized reactor deployment, removing regulatory barriers for domestic SMR companies like SAIHEAT [4]. - **Cryptocurrency and AI Infrastructure Demand**: The surge in Bitcoin prices (up 26% since April 1, 2025) and the passage of the GENIUS Act on May 19, 2025, have increased demand for energy-efficient computing, positioning SAIHEAT's solutions favorably [5]. Group 2: Operational and Strategic Positioning - SAIHEAT reported fiscal year 2024 revenue of $5.54 million, slightly above the $5.45 million estimate, but incurred a net loss of $5.89 million due to R&D investments. The company is integrating AI data centers and Bitcoin mining infrastructure to monetize cross-sector demand [6]. - The company's containerized IDC solutions and liquid cooling platforms are gaining traction, with pilot deployments transitioning into full contracts amid the AI and Bitcoin boom [6]. Group 3: Analyst Insight - Chan Kwok Keung from uSmart Securities noted that SAIHEAT has transitioned from a niche SMR player to a comprehensive computing infrastructure operator, with recent patent advancements and favorable policies reducing growth risks. The company's valuation remains significantly discounted compared to peers [7]. Group 4: Valuation Context - The raised target price of $31.32 reflects sector re-rating momentum, with nuclear-themed compute peers outperforming broader indices. SAIHEAT's unique growth potential and intellectual property advantages justify this valuation upgrade [8].