Financial Data and Key Metrics Changes - The company reported record revenue of $5.1 billion, up 9% year-over-year, with earnings per share of $1.88, up 25% year-over-year [3][14] - Pre-tax margin improved to 36%, and return on tangible common equity was 26% [3][16] - Total assets under custody and administration (AUCA) reached $57.8 trillion, up 11% year-over-year [14] - Net interest income was $1.2 billion, up 18% year-over-year, driven by reinvestment of maturing investment securities at higher yields [15][17] Business Line Data and Key Metrics Changes - Security Services segment reported total revenue of $2.5 billion, up 11% year-over-year, with investment services fees also up 11% [18] - Market and Wealth Services segment revenue was $1.8 billion, up 14% year-over-year, with net new assets of $3 billion driven by inflows from existing and new clients [21] - Investment and Wealth Management segment revenue was $824 million, down 3% year-over-year, with assets under management flat at $2.1 trillion [22][23] Market Data and Key Metrics Changes - The U.S. economy remained resilient despite a cooling labor market and persistent inflation [3][4] - Equity markets continued to climb, and credit spreads remained tight, contributing to solid growth in client balances and robust trading activity [4] Company Strategy and Development Direction - The company is focused on two core transformation programs: a new commercial model and a platforms operating model, both showing positive results [5][9] - The company is embracing AI, launching the BNY AI Lab in collaboration with Carnegie Mellon University to advance AI research and deployment [10][11] - The company aims to enhance its digital asset capabilities and has made significant investments in this area, including partnerships for tokenization and blockchain initiatives [7][8][76] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate uncertainties such as geopolitical conditions and trade policies while executing its strategy [4][13] - The company expects net interest income for the fourth quarter to be approximately flat sequentially, projecting a full-year increase of 12% year-over-year [25] - Management highlighted the importance of a diversified platform-oriented strategy to capitalize on various market conditions [32][33] Other Important Information - The company returned approximately $1.2 billion of capital to shareholders, resulting in a 92% total payout ratio year-to-date [17] - The transition to the platforms operating model is expected to be completed within the next year, with full benefits anticipated by early 2028 [9] Q&A Session Summary Question: How much of this growth year over year would you attribute to actions that you've taken versus just a generally good market backdrop? - Management indicated that the growth is a mix of organic growth, higher market levels, and foreign exchange impacts, with a balanced contribution from each factor [27][29] Question: Can you expand a little bit more about de-risking the balance sheet and how you've changed your approach towards interest rate risk management? - Management emphasized the strength and liquidity of the balance sheet, noting proactive measures taken to position for potential lower interest rates [36][39] Question: What early trends have you seen on the back of M&A activity regarding securities lending? - Management noted no significant changes in securities lending but highlighted the importance of the business within the broader collateral management franchise [46][48] Question: Do you think the rise of stablecoins could put pressure on fee rates? - Management viewed the evolution of money market funds and stablecoins as an opportunity rather than turbulence, emphasizing the company's readiness to adapt to technological changes [56][58] Question: How does the company view the total addressable market (TAM) for digital assets? - Management sees digital assets as a long-term opportunity, with investments made to position the company for various aspects of the evolving market [75][77]

Financial Data and Key Metrics Changes - BNY Mellon reported record revenue of $5.1 billion, up 9% year-over-year, with a pre-tax margin improvement to 36% and a return on tangible common equity of 26% [3][16] - Earnings per share reached $1.88, reflecting a 25% increase year-over-year [3][16] - Total assets under custody and administration (AUCA) increased to $57.8 trillion, up 11% year-over-year [14] Business Line Data and Key Metrics Changes - Security Services segment revenue was $2.5 billion, up 11% year-over-year, with investment services fees also increasing by 11% [18] - Market and Wealth Services segment reported total revenue of $1.8 billion, up 14% year-over-year, with investment services fees rising by 9% [20] - Investment and Wealth Management segment revenue decreased to $824 million, down 3% year-over-year, with investment management fees down 1% [22] Market Data and Key Metrics Changes - The U.S. economy remained resilient despite a cooling labor market and persistent inflation above the Federal Reserve's target [3] - Equity markets continued to rise, and credit spreads remained tight, contributing to solid growth in client balances and robust trading activity [4] Company Strategy and Development Direction - BNY Mellon is focused on reimagining its operations through two core transformation programs: a new commercial model and a platforms operating model [4][10] - The company is embracing AI, launching the BNY AI Lab in collaboration with Carnegie Mellon University to advance AI research and deployment [10] - The firm is also investing in digital assets and blockchain technology to support institutional adoption and enhance product offerings [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate uncertainties, including geopolitical conditions and trade policies, while executing its transformation strategy [4][12] - The company anticipates continued organic growth driven by its integrated solutions and the successful implementation of its commercial model [5][10] Other Important Information - BNY Mellon returned approximately $1.2 billion of capital to shareholders, resulting in a 92% total payout ratio year-to-date [17] - The firm expects net interest income for the fourth quarter to be approximately flat sequentially, projecting a full-year increase of 12% year-over-year [25] Q&A Session Summary Question: How much of this growth year over year would you attribute to actions that you've taken versus just a generally good market backdrop? - Management indicated that the growth is a mix of organic growth, higher market levels, and foreign exchange impacts, with the commercial model and platform operating model positioning the company to take advantage of market opportunities [27][29] Question: Can you expand a little bit more about de-risking the balance sheet and how you've changed your approach towards interest rate risk management? - Management highlighted the sophistication of their risk management tools and the strength of their balance sheet, which has allowed them to navigate seasonal declines in deposits while capitalizing on capital markets activity [36][38] Question: What early trends have you seen on the back of M&A activity regarding securities lending? - Management noted that while they haven't seen a noticeable change in securities lending, they remain focused on the business and its adjacency to broader collateral management services [42][44] Question: Is the move towards on-chain tokenization disruptive from revenue margins for BNY Mellon? - Management views the evolution towards on-chain capabilities as a tangible revenue opportunity rather than a risk, emphasizing their readiness to adapt to technological changes in the market [78][79]

Financial Data and Key Metrics Changes - The company reported record revenue of $5.1 billion, up 9% year over year [5][21] - Earnings per share increased to $1.88, reflecting a 25% year-over-year growth [6][24] - The pretax margin improved to 36%, with a return on tangible common equity of 26% [6][24] Business Line Data and Key Metrics Changes - Security Services revenue was $2.5 billion, up 11% year over year, driven by strong client activity and market values [28] - Markets and Wealth Services segment reported total revenue of $1.8 billion, up 14% year over year [30] - Investment and Wealth Management segment revenue decreased to $824 million, down 3% year over year, with assets under management flat at $2.1 trillion [33][34] Market Data and Key Metrics Changes - Firm-wide assets under custody and administration (AUCA) increased to $57.8 trillion, up 11% year over year [22] - The ETF AUCA grew by 35% year over year, outperforming market growth [28] - Foreign exchange revenue was down 5% year over year, reflecting corporate treasury activity [22] Company Strategy and Development Direction - The company is focused on two core transformation programs: a new commercial model and a platform operating model [8][9] - The new commercial model aims to deliver integrated solutions and enhance client relationships [9][10] - The company is investing in AI and has launched the BNY AI Lab in collaboration with Carnegie Mellon University [16] Management's Comments on Operating Environment and Future Outlook - Management noted a resilient U.S. economy despite challenges such as inflation and geopolitical risks [6][8] - The company expects net interest income for the fourth quarter to be flat sequentially, projecting a 12% year-over-year increase for the full year [36] - Management expressed confidence in the strategy's effectiveness, citing positive indicators for future success [19] Other Important Information - The company returned approximately $1.2 billion of capital to shareholders, resulting in a 92% total payout ratio year to date [25] - The transition to the platform operating model is over 70% complete, with expectations to finish by next year [14] Q&A Session Summary Question: How much of the growth year over year is attributed to company actions versus market conditions? - Management indicated that the growth is a balanced mix of organic growth, higher market levels, and foreign exchange impacts, with the new commercial model enabling better cross-selling opportunities [40][41] Question: Can you expand on the approach towards interest rate risk management? - Management highlighted the sophistication in risk management tools and a clean, liquid balance sheet, which has contributed to strong net interest income [49][51] Question: What early trends have been seen in securities lending due to capital markets activity? - Management noted no significant changes in securities lending but emphasized the importance of the business within the broader collateral management franchise [58][60] Question: How does the company view the evolution of money market funds and stablecoins? - Management sees the evolution as an opportunity rather than turbulence, emphasizing the company's readiness to adapt to technological changes in the market [68][70] Question: Can you provide insights on multiline business solutions and their growth? - Management indicated that nearly half of the asset servicing wins were multiline solutions, reflecting a meaningful increase compared to previous periods [75][78]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 2.2% sequentially and 2.9% year-on-year in constant currency terms for Q2 [2][3] - Operating margin was reported at 21% [3] - The revenue growth guidance for the financial year was revised to 2% to 3% in constant currency terms, while the operating margin guidance remains at 20% to 22% for the full year [4] Business Line Data and Key Metrics Changes - Large deals amounted to $3.1 billion, with 67% being new or net new work [3] - The company added 8,000 employees during the quarter [3] Market Data and Key Metrics Changes - Strong performance was noted in manufacturing and financial services, while retail continues to face constraints [10][21] - The company has seen good traction in its client base, particularly in financial services and manufacturing [21] Company Strategy and Development Direction - The company is focusing on deploying AI across enterprises for growth and cost efficiency [3][16] - There is a strong emphasis on scaling the team of forward-deployed engineers to support AI initiatives [3] - The company is actively looking at further acquisitions to enhance capabilities in various sectors [14][60] Management's Comments on Operating Environment and Future Outlook - The management acknowledged the uncertain global environment but expressed confidence in the guidance due to good traction observed [9][21] - The company is adapting to changes in the macroeconomic environment, with a focus on cost optimization and automation [29] Other Important Information - The company is strengthening its nearshore centers and local hiring strategies in response to stricter H-1B visa norms [44][46] - The recent mega deal worth $1.6 billion is with the UK NHS, focusing on a complete transformation supported by AI technologies [44] Q&A Session Summary Question: Insights on guidance and industry recovery - The management explained that the guidance reflects a typical seasonal pattern, with the second half of the year being slower than the first half, and noted good performance in manufacturing and financial services despite constraints in retail [9][10] Question: H-1B visa concerns - The management stated that the majority of employees in the U.S. do not require Infosys immigration support and emphasized a focus on local hiring and nearshore strategies [11][12][64] Question: AI revenue quantification - The management acknowledged the interest in AI projects and indicated that they are scaling up efforts in enterprise AI, but did not provide specific revenue figures [16][20] Question: Project Maximus impact - The management reported that Project Maximus has continued to deliver margin expansion despite headwinds, contributing positively to the operating margin [26] Question: Client contribution changes - The management noted that changes in client contributions are marginal and attributed them to project ramp-ups and ramp-downs [32] Question: Acquisitions and growth outlook - The management confirmed ongoing interest in acquisitions to fill capability gaps and enhance growth, particularly in sectors like digital and AI [14][60] Question: Voluntary attrition increase - The management acknowledged an increase in voluntary attrition compared to the previous year but did not provide specific reasons [71] Question: Nearshore strategy - The management highlighted the success of nearshore centers and local hiring initiatives, which are expected to scale further [46][44]

Financial Data and Key Metrics Changes - In Q3 2025, the average market spot rates for Handysize and Supramax vessels were approximately $11,600 and $14,300 net per day, reflecting a decrease of 1% and an increase of 4% respectively compared to the same period in 2024 [5] - The average TCE earnings for Handysize and Supramax vessels were $11,680 and $13,410, representing a year-on-year decrease of 15% for Handysize and an increase of 10% for Supramax [8] - The company has utilized approximately $26 million of its announced $40 million share buyback program, completing about 65% of the targeted buyback [20] Business Line Data and Key Metrics Changes - The core business generated average TCE earnings of $11,680 for Handysize and $13,410 for Supramax in Q3 2025, with performance against market indices showing a $90 per day outperformance for Handysize but a $100 per day underperformance for Supramax [8][9] - Operating activities generated a daily average margin of $750 over 6,830 operating days in Q3 [10] Market Data and Key Metrics Changes - Global mined bulk loadings rose 4% year-on-year, driven by bauxite, fertilizers, and mined ores, while grain loadings decreased by 9% [5][6] - Coal earnings reduced by 6% year-on-year due to weaker demand from major markets, with China’s coal imports falling by 15% [7] - The combined global fleet of Handysize and Supramax vessels is estimated to grow by 4.3% in 2025, with newbuilding deliveries accounting for 4.4% of this growth [13] Company Strategy and Development Direction - The company aims to strategically renew and grow its fleet, maintaining fixed price purchase options on 13 long-term chartered vessels and planning to take delivery of newbuildings in 2026 [15] - The focus remains on expanding growth optionality while managing fleet renewal in a disciplined manner [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the dry bulk market, anticipating steady minor bulk demand growth and potential supply disruptions that could support tighter freight market conditions [21] - The company is prepared for ongoing macroeconomic and industry uncertainties, leveraging its financial strength and agile business model to navigate challenges [21] Other Important Information - The company has taken proactive steps to comply with new port tariffs, including transferring vessels to Singapore ownership to mitigate potential impacts [16][18] - The company does not believe it is subject to special tariffs under U.S. and Chinese regulations, as it maintains a diverse shareholder base [17][18] Q&A Session Summary Question: Can you elaborate on congestion and disruptions related to port tariffs? - Management noted that while there are concerns about congestion, the market has improved since summer, and strategic leadership has shifted to Singapore to align with regulatory definitions [28][29] Question: What is the expectation from the ongoing IMO meeting regarding supply dynamics? - Management expressed hope for regulations on decarbonization, which could positively impact the business and support new building initiatives [33] Question: How is the company managing disruptions from new port fees? - Management acknowledged that disruptions create inefficiencies, which could positively impact the market in the short term, while emphasizing the need for clarity on regulations [39][84] Question: What is the outlook for the spot market and outperformance in Q4? - Management indicated a positive outlook for the market, driven by demand growth and seasonal factors, while acknowledging the typical lag in performance during rising markets [56][58] Question: What are the CapEx plans and new building market expectations? - Management outlined a cautious approach to CapEx, focusing on share buybacks and monitoring the secondhand market, while noting that newbuilding orders remain low due to market uncertainties [72][76]

Financial Highlights - Third quarter revenue increased 10.1% sequentially to $33.1 billion, slightly above guidance, driven by strong demand for leading-edge process technologies [3][11] - Gross margin rose 0.9 percentage points sequentially to 59.5%, primarily due to cost improvements and higher capacity utilization [3][7] - Operating margin increased 1.0 percentage point sequentially to 50.6% [3] - EPS was TWD 17.44, up 39% year-over-year, with ROE at 37.8% [3] - Cash and marketable securities totaled TWD 2.8 trillion ($90 billion) at the end of the quarter [4] Business Line Performance - 3 nm process technology contributed 23% of wafer revenue, while 5 nm and 7 nm accounted for 37% and 14% respectively [4] - Revenue from the smartphone segment increased 19% to account for 30% of total revenue, while IoT and automotive segments grew by 20% and 18% respectively [4] - Data Center Equipment (DCE) revenue decreased by 20% to account for 1% of total revenue [4] Market Data - The company expects fourth quarter revenue to be between $32.2 billion and $33.4 billion, representing a 1% sequential decrease or a 22% year-over-year increase at the midpoint [6][7] - Full-year 2025 revenue is expected to increase by close to mid-30% year-over-year in U.S. dollar terms [11] Company Strategy and Industry Competition - TSMC is focusing on maintaining technology leadership and manufacturing excellence while investing in advanced process technologies to support AI-related demand [9][12] - The company is narrowing its 2025 CapEx range to $40 billion to $42 billion, with 70% allocated for advanced process technologies [10] - TSMC is expanding its global manufacturing footprint, including capacity expansion in Arizona and Japan, to meet strong multi-year AI-related demand [17][18] Management Commentary on Operating Environment and Future Outlook - Management remains optimistic about AI-related demand, expecting it to continue driving growth [11][13] - There are uncertainties regarding tariff policies that could impact consumer-related markets, but management is focused on technology leadership and customer trust [12] - The company is preparing for a structural increase in long-term market demand, particularly in AI applications [15] Other Important Information - TSMC's advanced packaging revenue is approaching 10% of total revenue, highlighting its importance in the competitive landscape [102] - The company is working closely with customers to ensure capacity meets demand, particularly in the AI sector [15][16] Q&A Session Summary Question: AI Demand Growth - Management confirmed that AI demand continues to be strong, with expectations for growth rates potentially exceeding previous mid-40% CAGR forecasts [26][27] Question: CapEx Outlook - Management indicated that CapEx will correlate with business opportunities, and they expect to continue investing to support growth [29][30] Question: CoWoS Capacity - Management is working to narrow the gap between demand and supply for CoWoS capacity, with updates expected next year [32] Question: Advanced Packaging Expansion - TSMC is building two advanced packaging fabs in Arizona and collaborating with partners to meet customer needs [75] Question: Revenue Growth Drivers - Growth is expected to be driven by technology migration, ASP increases, and volume growth [76][78] Question: AI Data Center Capacity - Management noted that 1 GW of AI data center capacity could require significant investment, but specific wafer demand figures are not yet available [89] Question: Competition and Strategic Initiatives - TSMC is focusing on system performance and advanced packaging to strengthen its competitive position in the Foundry 2.0 landscape [102] Question: Concerns about Prebuilt Inventory - Management expressed no concerns about prebuilt inventory levels, indicating they are at healthy seasonal levels [105]

Financial Highlights - In Q3 2025, revenue increased by 6% sequentially in NT and by 10.1% in USD to $33.1 billion, slightly exceeding guidance [5][6] - Gross margin rose by 0.9 percentage points sequentially to 59.5%, driven by cost improvements and higher capacity utilization [6][12] - Operating margin increased by 1.0 percentage point sequentially to 50.6% [6] - EPS was up 39% year over year, and ROE was 37.8% [6] Business Line Performance - Three nanometer process technology contributed 23% of wafer revenue, while five nanometer and seven nanometer accounted for 37% and 14% respectively [7] - Advanced technologies (seven nanometer and below) made up 74% of wafer revenue [7] - Revenue contribution by platform: HPC remained flat at 57%, smartphone increased by 19% to 30%, IoT grew by 20% to 5%, automotive rose by 18% to 5%, while DCE decreased by 20% to 1% [7][8] Market Data - Cash and marketable securities at the end of Q3 were NT2.8 trillion (approximately $90 billion) [8] - Current liabilities decreased by NT101 billion quarter over quarter, mainly due to a reduction in accrued liabilities [8] Company Strategy and Industry Competition - TSMC is narrowing its 2025 CapEx guidance to between $40 billion and $42 billion, with 70% allocated for advanced process technologies [14] - The company aims to leverage its manufacturing technology leadership and large-scale production to remain the most efficient and cost-effective manufacturer [13] - TSMC is expanding its global manufacturing footprint, with significant investments in Arizona, Japan, and Europe to meet strong AI-related demand [22][24] Management Commentary on Operating Environment and Future Outlook - Management expects continued strong demand for leading-edge process technologies, particularly in AI, with full-year 2025 revenue projected to increase by close to mid-thirties percent year over year in USD terms [16][17] - There are uncertainties regarding tariff policies that could impact consumer-related markets, but TSMC remains focused on technology leadership and customer trust [17][20] - The company is preparing for a structural increase in long-term market demand, particularly in AI applications, and is employing a disciplined capacity planning process [20][21] Other Important Information - TSMC's two nanometer technology is on track for volume production later this quarter, with expectations for a faster ramp in 2026 [25][26] - The company is also introducing N2P as an extension of its N2 family, with volume production scheduled for the second half of 2026 [26] Q&A Session Summary Question: AI Demand Growth - Management confirmed that AI demand continues to be strong, with expectations for growth rates potentially exceeding previous mid-forties CAGR guidance [34][35] Question: CapEx Outlook - Management indicated that CapEx will correlate with growth opportunities, and while it is unlikely to drop significantly, it may increase in response to strong demand [38][40] Question: AI Infrastructure and Token Growth - Management acknowledged that token growth is expected to be exponential, and TSMC's technology will enable customers to handle increased demand effectively [78][84] Question: Competition and Strategic Initiatives - TSMC is focusing on Foundry 2.0 to enhance system performance and is working closely with customers to maintain competitive advantages [112][113] Question: Smartphone Demand and Prebuild Concerns - Management expressed no concerns about prebuild inventory levels, indicating that they are currently healthy and at seasonal levels [117]

Financial Highlights - Third quarter revenue increased 10.1% sequentially to $33.1 billion, slightly exceeding guidance, driven by strong demand for leading-edge process technologies [3][10] - Gross margin rose 0.9 percentage points sequentially to 59.5%, attributed to cost improvements and higher capacity utilization, despite foreign exchange challenges [3][6] - Operating margin increased 1.0 percentage point sequentially to 50.6% [3] - Earnings per share (EPS) was 17.44 NT, up 39% year over year, with a return on equity (ROE) of 37.8% [3] Business Line Performance - Revenue contribution from 3-nanometer process technology was 23%, while 5-nanometer and 7-nanometer accounted for 37% and 14% respectively [4] - High-Performance Computing (HPC) remained flat at 57% of revenue, while smartphone revenue increased 19% to 30%, IoT grew 20% to 5%, and automotive rose 18% to 5% [4] - Data Center Equipment (DCE) revenue decreased 20% to 1% [4] Market Data - The company ended the third quarter with cash and marketable securities of 2.8 trillion NT ($90 billion) [4] - Current liabilities decreased by 101 billion NT, mainly due to a reduction in accrued liabilities [4] Company Strategy and Industry Competition - TSMC is narrowing its 2025 capital expenditures (CAPEX) guidance to between $40 billion and $42 billion, with 70% allocated for advanced process technologies [9] - The company expects gross margin dilution from overseas fabs to be between 1% to 2% for the full year 2025, improved from previous estimates [7] - TSMC aims to leverage its manufacturing technology leadership and large-scale production to remain competitive [8] Management Commentary on Operating Environment and Future Outlook - Management noted strong AI-related demand and a mild recovery in non-AI segments, projecting full-year 2025 revenue growth of close to mid-30% year over year in U.S. dollar terms [10][11] - The company remains cautious about potential tariff impacts on consumer-related markets but is committed to investing in future megatrends [11] - TSMC is focused on technology leadership, manufacturing excellence, and customer trust to strengthen its competitive position [11] Other Important Information - TSMC is expanding its global manufacturing footprint, with significant progress in Arizona and plans for additional fabs in Japan and Germany [16][17] - The company is preparing for the ramp-up of its 2-nanometer technology, with volume production expected later this quarter [18] Q&A Session Summary Question: AI Demand Growth - Management confirmed that AI demand is stronger than previously anticipated, with an expected CAGR in the mid-40% range for AI accelerators [21][24] Question: CAPEX Outlook - Management indicated that CAPEX will correlate with business opportunities, and they will continue to invest as long as growth opportunities exist [26][27] Question: CoWoS Capacity - Management is working to increase CoWoS capacity to meet demand but did not provide specific numbers for 2026 [30] Question: Competition and Foundry 2.0 - TSMC is focusing on system performance and advanced packaging as part of its Foundry 2.0 strategy to enhance competitiveness [74][76] Question: Smartphone Prebuilt Concerns - Management expressed no concerns about prebuilt inventory levels, indicating they are healthy and seasonal [79]

Financial Highlights - In Q3 2025, revenue increased by 10.1% sequentially to $33.1 billion, slightly exceeding guidance [6][10] - Gross margin rose by 0.9 percentage points sequentially to 59.5%, driven by cost improvements and higher capacity utilization [6][11] - Operating margin increased by 1.0 percentage point sequentially to 50.6% [6] - EPS was up 39% year-over-year, and ROE stood at 37.8% [6] Business Line Performance - Three nanometer process technology contributed 23% of wafer revenue, while five nanometer and seven nanometer accounted for 37% and 14% respectively [7] - Advanced technologies (seven nanometer and below) represented 74% of wafer revenue [7] - Revenue from the smartphone segment increased by 19% to account for 30% of total revenue [7] - HPC remained flat at 57%, while IoT and automotive segments grew by 20% and 18% respectively [7] Market Data - Cash and marketable securities totaled NT$2.8 trillion (approximately $90 billion) at the end of Q3 2025 [8] - Current liabilities decreased by NT$101 billion quarter-over-quarter [8] - Accounts receivable turnover days increased by 2 days to 25 days, while days of inventory decreased by 2 days to 74 days [8] Company Strategy and Industry Competition - TSMC plans to narrow its 2025 CapEx guidance to between $40 billion and $42 billion, with 70% allocated for advanced process technologies [13][14] - The company aims to leverage its manufacturing technology leadership and large-scale production to remain competitive [12][13] - TSMC is expanding its global manufacturing footprint, including capacity expansions in Arizona, Japan, and Germany [21][24] Management Commentary on Operating Environment and Future Outlook - Management noted strong demand for leading-edge process technologies, particularly in AI-related markets [15][16] - The company expects full-year 2025 revenue to increase by close to mid-30s percent year-over-year [16] - Management remains cautious about potential impacts from tariff policies and is focused on maintaining technology leadership and customer trust [17][18] Other Important Information - TSMC's two nanometer technology is on track for volume production later this quarter, with expectations for a faster ramp in 2026 [26] - The company is also introducing N2P technology, which offers further performance benefits [26] Q&A Session Summary Question: AI Demand and Growth Forecast - Management confirmed that AI demand is stronger than previously anticipated, with an updated CAGR expected to be better than mid-40s [35] - They emphasized that CapEx will correlate with business opportunities, and growth in revenue should outpace CapEx growth [37] Question: Capacity Expansion Plans - Management indicated that they are working hard to narrow the gap between demand and supply, with plans to increase capacity in 2026 [42] Question: Advanced Packaging and Revenue Drivers - Management stated that growth will be driven by a combination of technology migration, ASP increases, and volume growth [84] Question: Competition and Strategic Initiatives - TSMC is focusing on a holistic approach to system performance, integrating front-end and back-end processes to enhance competitiveness [99] Question: Concerns about Prebuild Inventory - Management expressed no concerns about prebuild inventory levels, noting that inventory is at healthy seasonal levels [101]

Financial Data and Key Metrics Changes - Revenue was roughly flat year over year, while operating income improved by 8% and diluted earnings per share improved by 18% compared to the prior year period [10][11] - Despite inflation in insurance, wages, employee benefits, and equipment costs, productivity and cost management efforts offset these headwinds [10][11] Business Line Data and Key Metrics Changes - Intermodal volumes declined by 1% year over year, but the company outperformed the broader truckload market decline due to customers converting freight to intermodal [15][32] - The final mile business faced challenges with soft demand for furniture, exercise equipment, and appliances, but positive demand was noted in the fulfillment network driven by off-price retail [20][21] - Integrated Capacity Solutions (ICS) saw modest sequential improvement in volumes, with rates up low to mid-single digits and winning volume with new customers [22] Market Data and Key Metrics Changes - Overall demand trended below normal seasonality for much of the quarter, with truckload capacity continuing to exit the market [14] - Truckload spot rates remained under pressure throughout the quarter, but recent regulatory developments are impacting capacity [14][66] Company Strategy and Development Direction - The company is focused on operational excellence, scaling investments, and repairing margins to drive stronger financial performance [5][6] - A significant emphasis is placed on lowering the cost to serve, with a goal of removing $100 million in structural costs from the business [12][13] - The company aims to leverage its reputation for service excellence to drive strategic growth and maximize returns on investments [6][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to rail consolidation and emphasized the importance of long-term agreements with major rail providers [7][31] - The company expects to continue generating significant cash flow and remains focused on strong returns with deployed capital [12][13] - Management acknowledged the challenges in the current market but remains optimistic about future growth opportunities [10][34] Other Important Information - The company has made progress in its initiative to lower costs, having eliminated over $20 million in the quarter [12] - The company is leveraging technology and automation to improve operational efficiency and customer satisfaction [81][84] Q&A Session Questions and Answers Question: Can you provide details on the $20 million cost savings and how it played out by segment? - Management indicated progress across all areas of the business, with improvements in efficiency and productivity noted in intermodal and dedicated services [37] Question: What is the outlook for pricing and how does it relate to the cost savings initiative? - Management clarified that while the rate environment has been challenging, the cost savings initiative is expected to enhance performance durability when the market improves [44][46] Question: How do you expect loads and volumes to trend in the upcoming quarter? - Management noted that while the ocean peak season may have ended, domestic demand is expected to remain strong as customers prepare for the holiday season [75]