Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $2,382 million, representing a sequential increase of 7.8% [4][11] - Gross margin improved to 22%, up 1.6 percentage points sequentially [4][15] - Profit from operations was $351 million, with EBITDA at $1,430 million and an EBITDA margin of 60% [4] - Profit attributable to the company was $192 million [4] - Total assets at the end of Q3 were $49.4 billion, with total cash on hand at $11.4 billion and total liabilities at $16.4 billion [6] - Debt-to-equity ratio was 34.8%, and net debt-to-equity ratio was 0.4% [6] - Net cash generated from operating activities was $941 million, while net cash used in investing activities was $2.062 billion [7] Business Line Data and Key Metrics Changes - Wafer revenue from 12-inch and 8-inch wafers accounted for 77% and 23% respectively, with stable proportions [11] - The utilization rate was 95.8%, and wafer shipments increased by 4.6% sequentially to 2,499,000 standard logic 8-inch equivalent wafers [11] - Blended wafer price increased by 3.8% sequentially due to a favorable product mix [11] Market Data and Key Metrics Changes - Revenue by region showed China accounting for 86%, the Americas 11%, and New Asia 3% [13] - Revenue from the China region increased by 11% sequentially, driven by demand pull-in and domestic market expansion [13] Company Strategy and Development Direction - The company is focusing on strengthening its product platforms, with advancements in specialty technologies and 28-nanometer ULP logic processes [18][19] - The company is seizing growth opportunities in the automotive chip market by launching multiple specialty processes [19] - The overall production lines are still in short supply, indicating a robust demand for the company's products [20] Management's Comments on Operating Environment and Future Outlook - The fourth quarter is expected to follow a traditional seasonal pattern, with revenue guidance flat to up 2% sequentially and gross margin expected between 18% to 20% [8][17] - Full-year revenue is anticipated to exceed $9 billion, marking a new milestone [17] - The company is collaborating with customers to ensure sustainable orders amid the ongoing reshuffling in the domestic industrial chain [20] Other Important Information - For the first three quarters of 2025, revenue reached $6.838 billion, up 17.4% year-over-year, with a gross margin of 21.6% [16] Q&A Session Summary Question: Inquiry about the impact of the super cycle on the company - Management discussed the potential effects of the super cycle on the company's operations and market positioning [24] Question: Questions regarding MCU and other product lines - Management provided insights into the performance and future expectations for MCU and other integrated circuits [26] Question: Inquiry about the company's growth in AI and other sectors - Management addressed the growth in AI and other major application fields, noting moderate growth or stability [20]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $2,382 million, representing a sequential increase of 7.8% [4][11] - Gross margin improved to 22%, up 1.6 percentage points sequentially [4][15] - Profit from operations was $351 million, with EBITDA at $1,430 million and an EBITDA margin of 60% [4] - Profit attributable to the company was $192 million [4] - Total assets reached $49.4 billion, with total cash on hand at $11.4 billion and total liabilities at $16.4 billion [5] - The debt-to-equity ratio was 34.8%, and the net debt-to-equity ratio was 0.4% [5] - Net cash generated from operating activities was $941 million, while net cash used in investing activities was $2.062 billion [6] Business Line Data and Key Metrics Changes - Wafer revenue from 12-inch and 8-inch wafers accounted for 77% and 23% respectively, with stable proportions [11] - The utilization rate was 95.8%, and wafer shipments increased by 4.6% sequentially to 2,499,000 standard logic 8-inch equivalent wafers [11] - Blended wafer price increased by 3.8% sequentially due to a favorable product mix [11] Market Data and Key Metrics Changes - Revenue by region: China accounted for 86%, America 11%, and New Asia 3% [12] - Revenue from the China region increased by 11% sequentially, driven by demand pull-in and domestic market expansion [12] Company Strategy and Development Direction - The company is focusing on strengthening its product platforms, with advancements in specialty technologies and a variety of applications [18] - The company is actively collaborating with customers to ensure shipments and meet demand amid industry reshuffling [19][20] - The fourth quarter is expected to follow a traditional seasonal pattern, with revenue guidance flat to up 2% sequentially [8][17] Management's Comments on Operating Environment and Future Outlook - Management noted that the overall production lines are still in short supply, indicating strong demand [20] - The company anticipates a successful completion of 2025, with full-year revenue expected to exceed $9 billion [17][21] Other Important Information - For the first three quarters of 2025, revenue reached $6.838 billion, up 17.4% year-over-year [16] - The gross margin for the first three quarters was 21.6%, up 5.3 percentage points compared to the same period last year [16] Q&A Session Summary Question: Inquiry about the super cycle and 2026 outlook - Management discussed the potential for a super cycle in 2026 and the company's readiness to meet demand [23][24] Question: Questions regarding MCU and product lines - Management provided insights on MCU production and the company's focus on various product lines, including NOR Flash and NAND Flash [25][26] Question: Further inquiries on specific technologies and market trends - Management addressed questions related to specific technologies such as CMOS Image Sensors and market trends in automotive and consumer electronics [27][28]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was CNY 193 billion, representing a 15% year-on-year increase [3] - Gross profit increased to CNY 109 billion, up 22% year-on-year [3] - Non-IFRS operating profit rose to CNY 73 billion, an 18% year-on-year increase [4] - Non-IFRS net profit attributable to equity holders was CNY 71 billion, also up 18% year-on-year [4] - Overall gross margin improved to 56%, up 3 percentage points year-on-year [18] Business Line Data and Key Metrics Changes - Value-added services (VAS) revenue was CNY 96 billion, up 16% year-on-year, contributing 50% of total revenue [6] - Social networks revenue increased by 5% year-on-year to CNY 32 billion, driven by video accounts and live streaming [7] - Domestic games revenue grew by 15% year-on-year, primarily from Delta Force and Honor of Kings [7] - International games revenue surged by 43% year-on-year, attributed to upfront revenue recognition from Dying Light: The Beast [8] - Marketing services revenue increased by 21% year-on-year to CNY 36 billion, supported by ad spend growth [13] Market Data and Key Metrics Changes - Combined monthly active users (MAU) of Weixin and WeChat reached 1.4 billion, showing growth both year-on-year and quarter-on-quarter [4] - Music subscription revenue increased by 17% year-on-year, with subscribers growing to 126 million [7] - The mobile launch of Valorant resulted in over 50 million combined monthly active users in October [10] Company Strategy and Development Direction - The company is focusing on strategic investments in AI, enhancing capabilities in ad targeting and game engagement [3] - The Hunyuan foundation model is being upgraded to improve its capabilities in imagery and 3D generation [3] - The company aims to continue acquiring game studios and bringing self-developed games to global markets [22] Management's Comments on Operating Environment and Future Outlook - Management noted that the gaming business growth rate is expected to decelerate closer to underlying trends in the upcoming quarters [22] - The macroeconomic environment is gradually improving, which may positively impact consumer spending and payment services [65] - Management expressed confidence in the ongoing improvements in AI capabilities and their integration into Weixin [34] Other Important Information - The company reported a free cash flow of CNY 58.5 billion, largely stable year-on-year [19] - The net cash position increased to CNY 102.4 billion, up 37% quarter-on-quarter [19] Q&A Session Summary Question: What has driven the growth in international gaming business? - The growth rate was boosted by the consolidation of newly acquired studios and upfront revenue recognition from Dying Light: The Beast [22] Question: Can you elaborate on the Hunyuan team upgrades? - The company is hiring top talent and improving the Hunyuan architecture to enhance AI capabilities [27] Question: How does the AI Marketing Plus solution benefit advertisers? - The solution allows advertisers to automate targeting and bidding, leading to improved returns on investment [29] Question: What is the outlook for advertising revenue growth? - The growth is expected to continue, supported by AI capabilities and improving consumer spending [45] Question: How does the company view its investment strategy in the current market? - The company is actively recycling its portfolio and investing in emerging growth opportunities, particularly in AI startups [55]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was CNY 193 billion, representing a 15% year-on-year increase [3][16] - Gross profit increased to CNY 109 billion, up 22% year-on-year [3][16] - Non-IFRS operating profit reached CNY 73 billion, an 18% year-on-year increase [3][16] - Non-IFRS net profit attributable to equity holders was CNY 71 billion, also up 18% year-on-year [4][16] - Overall gross margin improved to 56%, up 3 percentage points year-on-year [18] Business Line Data and Key Metrics Changes - Value-added services (VAS) accounted for 50% of total revenue, with social networks at 17%, domestic games at 22%, and international games at 11% [6] - Marketing services contributed 19% to total revenue, while fintech and business services made up 30% [6] - Domestic games revenue grew by 15% year-on-year, driven by titles like Delta Force and Honor of Kings [7] - International games revenue surged by 43% year-on-year, attributed to upfront revenue recognition from Dying Light: The Beast and consolidation of acquired studios [8][12] Market Data and Key Metrics Changes - Combined monthly active users (MAU) of Weixin and WeChat reached 1.4 billion, showing growth year-on-year and quarter-on-quarter [4] - Music subscription revenue increased by 17% year-on-year, with music subscribers growing to 126 million [7] - Marketing services revenue rose by 21% year-on-year to CNY 36 billion, supported by ad spend growth across major categories [13] Company Strategy and Development Direction - The company is focusing on strategic investments in AI, enhancing capabilities in ad targeting and game engagement [3] - The Hunyuan foundation model is being upgraded to improve its capabilities in imagery and 3D generation, aiming for industry leadership [3] - The company plans to continue acquiring game studios and bringing self-developed games to global markets [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of the international gaming business but noted a potential deceleration in growth rates [22] - The macroeconomic environment is gradually improving, which could positively impact consumer spending and fintech services [65] - Management highlighted that AI capabilities are expected to drive revenue growth and improve operational efficiency [36] Other Important Information - The company reported a free cash flow of CNY 58.5 billion, largely stable year-on-year, with a net cash position of CNY 102.4 billion [19] - R&D expenses rose by 28% year-on-year, reflecting increased investment in AI initiatives [18] Q&A Session Summary Question: What has driven the growth in international gaming? - The growth rate was boosted by the consolidation of newly acquired studios and upfront revenue recognition from Dying Light: The Beast, but is expected to decelerate [22] Question: Can you elaborate on the Hunyuan team upgrades? - The company is hiring top talent and improving infrastructure to enhance the Hunyuan model's capabilities [28] Question: How does the AI Marketing Plus solution benefit advertisers? - The solution allows for automated bidding, which has shown positive early results in terms of ROI for advertisers [76] Question: What is the outlook for advertising revenue growth? - The growth is expected to continue, supported by improved consumer spending and AI capabilities [45] Question: How does the company view its relationship with Apple? - The company has a constructive relationship with Apple and is working to enhance the mini game ecosystem [44] Question: What are the trends in consumer loans and cloud revenue? - Consumer loans are stable due to conservative underwriting, while cloud revenue growth is constrained by AI chip availability [67]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was CNY 193 billion, up 15% year-on-year [4] - Gross profit increased to CNY 109 billion, reflecting a 22% year-on-year growth [4] - Non-IFRS operating profit rose to CNY 73 billion, an 18% increase year-on-year [4] - Non-IFRS net profit attributable to equity holders was CNY 71 billion, also up 18% year-on-year [5] - Overall gross margin improved to 56%, up 3 percentage points year-on-year [18] Business Line Data and Key Metrics Changes - Value-added services (VAS) revenue was CNY 96 billion, up 16% year-on-year, contributing 50% of total revenue [6] - Social networks revenue increased by 5% year-on-year to CNY 32 billion, driven by video accounts and music subscriptions [7] - Domestic games revenue grew by 15% year-on-year, primarily due to titles like Delta Force and Honor of Kings [7] - International games revenue surged by 43% year-on-year, attributed to upfront revenue recognition from new titles [8] - Marketing services revenue increased by 21% year-on-year to CNY 36 billion, supported by ad spend growth [12] Market Data and Key Metrics Changes - Combined monthly active users (MAU) of Weixin and WeChat reached 1.4 billion, showing growth both year-on-year and quarter-on-quarter [5] - Music subscription revenue increased by 17% year-on-year, with subscribers growing to 126 million [7] - The mobile launch of Valorant resulted in a doubling of combined monthly active users to over 50 million in October [10] Company Strategy and Development Direction - The company is focusing on strategic investments in AI, enhancing capabilities in ad targeting and game engagement [4] - The Hunyuan foundation model is being upgraded, with improvements in imagery and 3D generation models [4] - The company aims to grow Yuanbao adoption and develop agentic AI capabilities within Weixin [4][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of the international gaming business, although a deceleration in growth rates is expected [23] - The macroeconomic environment is gradually improving, which could positively impact consumer spending and payment volumes [66] - Management highlighted that AI capabilities are expected to drive future growth in advertising revenue [49] Other Important Information - The company reported a net cash position of CNY 102.4 billion, up 37% quarter-on-quarter [20] - Operating expenses increased, with R&D expenses rising by 28% year-on-year due to AI investments [18] Q&A Session Summary Question: What has driven the growth in international gaming? - The growth was supported by the consolidation of newly acquired studios and upfront revenue recognition from Dying Light: The Beast [23] Question: Can you elaborate on the Hunyuan team upgrades? - The company is hiring top talent and improving the Hunyuan architecture to enhance AI capabilities [30] Question: How does the AI Marketing Plus solution benefit advertisers? - The solution allows advertisers to automate targeting and bidding, leading to superior returns [33] Question: What is the outlook for advertising revenue growth? - The growth is expected to continue, driven by AI capabilities and improving consumer spending [49] Question: How does the company view its relationship with Apple? - The company has a constructive relationship with Apple and is working to enhance the mini game ecosystem [48] Question: What are the trends in consumer loans and cloud revenue? - Consumer loans are stable, and cloud revenue is expected to grow, although AI chip availability may constrain growth [68]

Financial Data and Key Metrics Changes - In Q3 2025, JD Logistics achieved total revenue of RMB 155.08 billion, representing a year-over-year increase of 24.1% [23] - Non-GAAP profit was RMB 2.02 billion with a profit margin of 3.7%, while non-GAAP EBITDA was RMB 5.32 billion, a decrease of 7.1% year-over-year [31] - Employee benefit expenses rose to RMB 21.82 billion, up 49.8% year-over-year, primarily due to the addition of full-time food delivery riders [26] Business Line Data and Key Metrics Changes - Revenue from ISC customers totaled RMB 13.13 billion, up 45.8% year-over-year, with external ISC customer revenue at RMB 8.93 billion, increasing by 13.5% [24] - Average revenue per external ISC customer reached RMB 134,000, up 0.7% year-over-year [25] - Revenue from other customers, including express and freight delivery services, was RMB 24.95 billion, up 5.1% year-over-year [25] Market Data and Key Metrics Changes - The number of external ISC customers grew to approximately 67,000, reflecting a 12.7% year-over-year increase [24] - JD Logistics maintained a strong position in the logistics market, ranking among the top tier in China for cargo volume and revenue scale in freight delivery services [26] Company Strategy and Development Direction - The company is focused on enhancing its service capabilities and expanding its international business, with plans to double the gross floor area of overseas warehouses by the end of 2025 [13] - JD Logistics aims to deepen its presence in the ISV space, leveraging digital technology and operational management to improve service efficiency [8] - The company is committed to investing in automation and digital technologies to enhance operational efficiency and reduce costs [19] Management's Comments on Operating Environment and Future Outlook - Management noted that China's macroeconomy remained stable, supporting JD Logistics' growth [23] - The company expects economies of scale and improved resource utilization to enhance profitability as business volume increases during peak seasons [23] - Management expressed confidence in the long-term growth potential driven by strategic investments and operational improvements [33] Other Important Information - JD Logistics was rated as the strongest logistics brand in 2025 by Brand Finance, highlighting its international competitiveness [16] - The company has established multiple overseas warehouses in the Middle East, enhancing its global logistics capabilities [11] Q&A Session Summary Question: Comments on capital investment, efficiency, and cost regarding automation - Management highlighted the importance of balancing investment and return in automation, with plans to gradually upgrade investments based on real-life data [39] Question: Orders accepted per day and innovation in food delivery - Management discussed the integration of full-time riders and outsourced riders to enhance delivery capacities and improve service quality [42] Question: Plans for the overseas market - Management outlined goals for building a global network by the end of 2025, focusing on capacity building and reducing compliance costs for customers [46] Question: Core sector and capacity in ISC customers - Management acknowledged the need to improve the number of ISC customers and RPARC, emphasizing the importance of serving both key and small accounts [51]

Financial Data and Key Metrics Changes - In Q3 2025, JD Logistics achieved total revenue of RMB 55.1 billion, representing a year-over-year increase of 24.1% [5] - Non-adverse net profit was RMB 2.02 billion, with a profit margin of 3.3% [5] - Average profit was RMB 1.96 billion, with a non-average profit margin of 3.6% [23] - Gross profit margin was 9.1% [26] - Non-GAAP profit was RMB 2.02 billion, down 21.5% year-over-year, with a non-GAAP profit margin of 3.7% [31] Business Line Data and Key Metrics Changes - Revenue from ISC customers totaled RMB 13.13 billion, up 45.8% year-over-year [24] - ISC revenue from JD Group amounted to RMB 21.20 billion, up 165.8% year-over-year [24] - Revenue from external ISC customers was RMB 8.93 billion, up 13.5% year-over-year [24] - Revenue from other customers, including express and freight delivery services, was RMB 24.95 billion, up 5.1% year-over-year [25] Market Data and Key Metrics Changes - The number of external ISC customers reached approximately 67,000, up 12.7% year-over-year [24] - Average revenue per customer for external ISC reached RMB 134,000, up 0.7% year-over-year [25] Company Strategy and Development Direction - The company is committed to building long-term capacities and compatibility, focusing on international business expansion and operational strengths [5] - JD Logistics aims to deepen its presence in the ISV space, leveraging digital technology and operational management [8] - The company plans to double the gross floor area of its overseas warehouse by the end of 2025 [13] Management's Comments on Operating Environment and Future Outlook - Management noted that China's economy maintained a steady and progressive trend, supported by proactive macro policies [4] - The company expects economies of scale and improved resource utilization to support profitability improvement as business volume increases [23] - Management emphasized the importance of enhancing delivery timeliness and customer experience to drive long-term growth [26] Other Important Information - JD Logistics was rated as the strongest logistics brand worldwide in 2025 by Brand Finance [16] - The company has established multiple overseas warehouses in the Middle East, enhancing its international logistics capabilities [11] Q&A Session Summary Question: Comments on automation and capital investment efficiency - Management highlighted the accumulation of automation technologies and the user-friendly nature of the equipment, with plans for large-scale application to improve long-term revenue [38][39] Question: Orders accepted per day and network utilization - Management discussed the stability and advantages of the full-time rider team, emphasizing improvements in delivery timeliness and user experience [40][42] Question: Plans for the overseas market - Management outlined goals for building a global network by the end of 2025, focusing on capacity building and reducing compliance costs for customers [46][47] Question: Core sector and customer numbers - Management acknowledged room for improvement in ISC customer numbers and average revenue per customer, with plans to enhance service offerings [51][52]

Financial Data and Key Metrics Changes - In Q3 2025, JD Logistics achieved total revenue of RMB 55.1 billion, representing a year-over-year increase of 24.1% [4][22] - Non-GAAP net profit was RMB 2.02 billion, with a profit margin of 3.3% [4][31] - Average profit was RMB 1.96 billion, with a non-GAAP profit margin of 3.7% [22][31] - Gross profit margin was 9.1% [25] - Employee benefit expenses increased by 49.8% year-over-year to RMB 21.82 billion, accounting for 39.6% of total revenue [25][26] Business Line Data and Key Metrics Changes - Revenue from direct-to-supply chain ISC customers reached RMB 13.1 billion, up 45.8% year-over-year [4][23] - ISC revenue from JD Group amounted to RMB 21.20 billion, up 165.8% year-over-year [23] - Revenue from external ISC customers was RMB 8.93 billion, up 13.5% year-over-year [23] - Revenue from other customers, including express and freight delivery services, was RMB 24.95 billion, up 5.1% year-over-year [12][24] Market Data and Key Metrics Changes - The number of external ISC customers reached approximately 67,000, up 12.7% year-over-year [23] - Average revenue per customer for external ISC was RMB 134,000, up 0.7% year-over-year [24] Company Strategy and Development Direction - The company is focused on enhancing service experience and delivery capabilities, with targeted investments in international business expansion and capacity improvement [4][22] - JD Logistics aims to deepen its presence in the ISV space, leveraging digital technology and operational management [8][10] - The company plans to double the gross floor area of its overseas warehouse by the end of 2025 [12] Management's Comments on Operating Environment and Future Outlook - Management noted that China's economy maintained a steady trend, supporting JD Logistics' growth [3][22] - The company expects economies of scale and improved resource utilization to support profitability improvement as business volume increases [22] - Management emphasized the importance of automation and technology investments for long-term growth and efficiency [35][39] Other Important Information - JD Logistics was rated as the strongest logistics brand in 2025 by Brand Finance [16] - The company has established multiple overseas warehouses in the Middle East, enhancing its international logistics capabilities [11][12] Q&A Session Summary Question: Comments on automation and capital investment - Management highlighted the extensive use of automation technologies and the balance between investment and return [34][35] Question: Orders accepted per day and network utilization - Management discussed the integration of full-time riders and the positive impact on delivery capacities and user experience [36][37] Question: Plans for the overseas market - Management outlined goals for building a global network and improving terminal-to-terminal capacities by the end of 2025 [39] Question: ISC customers and RPARC - Management acknowledged the need for improvement in ISC customer numbers and RPARC, focusing on enhancing product offerings [41][42]

Financial Performance - The group's revenue decreased by 9% to $991.1 million, primarily due to declines in all regions [2][4] - Gross profit reduced by 8.1% to $315.8 million, but gross profit margin improved from 31.5% to 31.9% due to lower material costs and favorable product mix [2][3] - Operating profit decreased by 10.8% to $92.9 million, with operating profit margin slightly down from 9.6% to 9.4% [3][4] - Profit attributable to shareholders fell by 14.5% to $74.7 million, with net profit margin decreasing from 8% to 7.5% [4] Business Line Performance - North America sales decreased by 12.1% to $398.3 million, driven by lower sales of electronic learning products (ELP) and telecom products [4][8] - European sales decreased by 7.2% to $429 million, with ELP revenue increasing by 5.5% to $144.6 million, offset by lower contract manufacturing services (CMS) sales [5][12] - Asia-Pacific revenue fell by 5.6% to $150 million, with declines across all product lines [17] - Other regions saw a revenue decrease of 11.3% to $13.4 million, primarily due to lower telecom product sales [5] Market Performance - North America accounted for 40.2% of group revenues, with ELP revenue down 25.4% due to tariff policy changes [8][11] - Europe remains the largest market, contributing 43.3% of revenue, with strong performance in telecom products [12][14] - Asia-Pacific represented 15.2% of overall revenue, with declines in ELP and telecom products [17] Company Strategy and Industry Competition - The company is expanding manufacturing capacity in Malaysia and exploring ODM opportunities to mitigate risks associated with geopolitical tensions and tariffs [20][30] - New product launches, including LeapMove and LeapStart Reading Buddies, are expected to drive sales growth in the second half of the financial year [20][21] - The company aims to maintain its leadership in electronic learning toys and telecom products despite challenging market conditions [8][12] Management Comments on Operating Environment and Future Outlook - The management noted that global business conditions remain challenging due to geopolitical tensions and fragile consumer confidence, leading to cautious order placements [19] - Full financial year revenue is still forecasted to decline, but second-half sales are expected to improve, particularly in ELPs and telecom products [20][21] - The company is optimistic about the performance of new products and the potential for recovery in lost sales from the first half [28][45] Other Important Information - The company declared an interim dividend of $17, unchanged from the previous year [4] - The net cash balance as of September 30, 2025, was $147.9 million, a decrease of 1.5% from the previous year [6] Q&A Session Summary Question: Growth prospects of new electronic learning products - Management expects new ELP products like LeapMove to drive higher growth in the future, with plans for numerous new product launches [22][23] Question: Integration of AI in future products - The company is exploring AI integration in product development, with ongoing projects in the development stage [24][25] Question: Recovery of lost sales in the US - Management indicated that while recovery is expected, overall ELP sales for the full year are still anticipated to be lower than last year [28][45] Question: Impact of tariffs and production shift to Malaysia - The current tariff rate for products from China to the US is 20%, with production in Malaysia providing a backup option [30][33] Question: Capital expenditure guidance - Capital expenditure for the first half of the fiscal year was $17 million, with a full-year forecast of $42 million [37] Question: M&A appetite post-Gigaset acquisition - The company remains open to M&A opportunities that enhance product breadth and technology [37] Question: Margin implications of dual production in China and Malaysia - The impact on margins from operating parallel facilities is minimal, with productivity differences being the main concern [38][41] Question: Capacity comparison between Malaysia and China - The Malaysian plant is expected to account for 25%-30% of total group capacity when fully operational [42]

Financial Data and Key Metrics Changes - The company reported a net sales decline of 1.3% for Q3, an improvement from a 5.2% decline in the first half of the year [37][38] - Gross margin improved to 59.6%, up 30 basis points year-over-year and 60 basis points from the previous quarter [7][46] - Adjusted EBITDA for the quarter was $143 million, with an adjusted EBITDA margin of 16.3% [38][39] - Adjusted net income was reported at $64 million [39] Business Line Data and Key Metrics Changes - Direct-to-consumer (D2C) sales increased by 3.5% period over period, with e-commerce sales up over 10% [4][5] - Non-travel sales grew by almost 7% in the quarter, representing a significant opportunity for the company [6][25] - Wholesale channel net sales declined by 4.5%, with traditional brick-and-mortar sales down around 7% [5][46] Market Data and Key Metrics Changes - North America saw a decline of 10% in net sales, primarily due to cautious purchasing by wholesale customers [11][40] - Asia's net sales were roughly flat, with TUMI showing a significant improvement of 7.1% in Q3 [42][40] - Europe reported a 1% increase in sales, while Latin America grew by 1.2%, with potential double-digit growth if not for issues in Mexico [41][45] Company Strategy and Development Direction - The company is focused on capitalizing on growth in travel and expanding its non-travel business, which has shown a 14% CAGR from 2020 to 2025 [25][19] - There is a strong emphasis on product innovation and enhancing advertising efforts to attract new customers [15][18] - The company plans to complete a dual listing in the U.S. by 2026 to enhance shareholder value [63][64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term growth despite current macroeconomic uncertainties and inflationary pressures [59][60] - Positive trends in constant currency sales growth were noted, with expectations for sequential improvement in Q4 [60][62] - The company is well-positioned to maintain strong gross margins and leverage its scale advantages [62][63] Other Important Information - The company has successfully refinanced its corporate debt, extending maturities and improving liquidity [55][56] - The DTC sales mix has increased to 42%, with e-commerce channels growing significantly [50][52] - The company has opened 43 net new stores over the past year, impacting G&A expenses [47][39] Q&A Session Summary Question: What are the long-term growth prospects for the company? - The company expects to drive medium and long-term sales growth supported by strong product launches and advertising campaigns, despite current economic uncertainties [59][60] Question: How is the company managing its gross margins amid tariff pressures? - The company has successfully managed gross margins through supplier partnerships and product re-engineering, maintaining a strong gross margin profile [62][46] Question: What is the company's strategy regarding the dual listing? - The company is preparing for a dual listing in the U.S. by 2026, believing it will enhance shareholder value [63][64]