Welcome everyone to the MPS fourth quarter 2025 earnings webinar. My name is Arthur Lee, and I'll be the moderator for this webinar.

Joining me today are Michael Hsing, CEO and founder of MPS, Bernie Blegen, EVP and CFO, Rob Dean, Corporate Controller, and Tony Balow, Vice President of Finance. Earlier today, along with our earnings announcement, MPS released a written commentary on the results of our operations.

Both documents can be found on our website. Before we begin, I'd like to remind everyone that in the course of today's presentation, we may make forward-looking statements and projections within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risk and uncertainties.

The risk, uncertainties, and other factors that could cause actual results to differ from these forward-looking statements are identified in the safe harbor statements contained in the Q4 2025 earnings release, our Q4 2025 earnings commentary, and in our SEC filings, including our Form 10-K and Forms 10-Q, which can be found on our website. Our statements are made as of today, and we assume no obligation to update this information.

Now, I'd like to turn the call over to Tony.

Thanks, Arthur. Good afternoon and welcome to our Q4 2025 earnings call.

Today we made an announcement that after 15 years at MPS, and 10 as the CFO, Bernie will be retiring. Before we begin our prepared remarks, I'd like to turn the webinar over to him for his thoughts on his time at MPS and the transition ahead.

Bernie?

Thanks, Tony. As I was preparing for today, I realized that this is my 40th earnings call as MPS's CFO.

That's a nice round number to finish up with. It's been my pleasure and honor to work closely with Michael for so long and to have been a part of MPS's leadership team.

I want to thank our investors and analysts for the trust you placed in me. It is natural for all businesses to go through cycles, but your support has been consistent regardless of the circumstances, and I have greatly appreciated it.

As I look ahead, MPS's prospects remain bright with our unique culture, our dedicated employees, and a fantastic portfolio of products. MPS is well positioned to sustain the broad-based growth you've come to expect from us during the last 10 years.

I have a lot of confidence in the team I am transitioning my responsibilities to, starting with Rob Dean, who will be our interim CFO. While many of you may not know Rob, we have been partners in this enterprise for the last nine years, and like my predecessor and for myself, Rob continues the MPS tradition of transitioning from MPS's controllership to CFO.

This ensures a lot of continuity in the role. Likewise, I will remain with the company to support a successful transition.

Rob, would you like to say a few words?

Yes. Thanks, Bernie, and I'm grateful to you and Michael for this opportunity to continue the tradition and to have been part of the MPS finance team while you have been CFO.

I know I speak for the entire finance team when I thank you, Bernie, for everything you've done over the last 15 years. He's not only helped guide the business to consistent growth and execution, but he's grown a great team around him.

I've worked closely with Michael and the executive team for close to a decade. We've developed a strong relationship, which I expect to continue as we grow the company and take on the opportunities ahead.

I appreciate the confidence they have placed in me in this new role. I look forward to meeting all of you in the coming days and weeks.

With that, I'll pass it over to Tony.

Thanks, Rob. I'll now move to our prepared remarks before going to Q&A.

In 2025, MPS posted its 14th consecutive year of growth with a full-year revenue of $2.8 billion, up 26.4% from 2024. For Q4 2025, we had a record quarterly revenue of $751.2 million, 1.9% above Q3 2025, and 20.8% higher than the fourth quarter of 2024.

This performance reflected our consistent execution, continued innovation, and relentless customer focus. Let me call out a few highlights from 2025.

Our non-enterprise data end markets grew by over 40% year over year, showcasing the strength of our diversified business model. We achieved our milestone of securing more than 4 billion of geographically balanced capacity and continued to add additional supply chain partners to support future growth.

We had record module revenue and positioned ourselves for a further shift to solutions by sampling our 800-volt power solution for data center. In automotive, we launched solutions for 48-volt and zonal architectures, including the first fully integrated 48-volt eFuse and a kilowatt-level zonal controller that will support growth in 2026 and beyond.

We expanded our customer base in data center for power solutions across AI, server, memory, optical modules, and switch applications, with leading-edge current density, power efficiency, and packaging. I am also pleased to announce that our quarterly dividend will increase 28% to $2 per share.

For the three years ending with December 2025, MPS has returned over 72% of free cash flow to stockholders through share repurchases and dividends. Our proven long-term growth strategy remains intact as MPS focuses on innovation and solving our customers' most challenging problems.

We continue to invest in new technology, expand into new markets, and to diversify both our end-market applications and global supply chain. This will allow us to capture future growth opportunities, maintain supply chain stability, and quickly adapt to market changes as they occur.

I will now open the webinar for questions.

Thank you, Tony. Analysts, I would now like to begin our Q&A session.

As a reminder, if you would like to ask a question, please click on the participants icon on the menu bar and then click the raise hand button. Our first question is from Chris Caso of Wolfe Research.

Chris, your line is now open.

Yes, thank you, and Bernie, I'm lucky to be the first to congratulate you on your retirement and wish you all the best. It's been a pleasure all these years.

Thank you very much, Chris.

For my first question, I guess as we look into the March quarter, could you give some color on what you're seeing with respect to the different segments? What do you see within the various market segments?

Sure, let me start to color this by talking a little bit about Q4 25. We saw a good step up in the ordering patterns in the quarter.

Our book-to-bill ratio was well in excess of one, and that's really reflected in our backlog, which is starting to extend out into Q2 and Q3 of 26. Our channel inventory stayed at the low end of our range.

We feel that we're servicing real demand and that we're seeing a strong ordering trend. As we look at the fourth quarter, you can see that we saw some pretty good strength, particularly as it relates to enterprise data and also to the communications.

We expect that those trends, along with automotive, should continue to extend into Q1 and into the remainder of the year.

Thank you. As a follow-up, and you mentioned enterprise data, and obviously that's been a focus of attention not just for you but the whole market.

You had made some comments in enterprise data for 26 on the last earnings call, and if I just annualize the Q4 numbers, you pretty much get to where that guidance was. What are your thoughts on that in the year, and perhaps is there a seasonal element to enterprise data as we go through the year?

Sure. I'll start off on this one.

As I said, in Q4, we saw some fairly pronounced changes in ordering patterns, which has given us a fair amount more of confidence as far as what the outlook for enterprise data could be in 26. Now, I think for those that you have worked with me for the last 10 years, you know that I like to stay pretty conservatively profiled when I make an estimate.

I'd probably say that whereas last quarter I talked about a range of between 30 and 40 percent, maybe I can increase that to a floor of 50 percent growth for 2025.

Well, 50 percent. I thought we can do a lot more than that.

Conservatively. This is what I see here.

We won many design wins, and across the board, not from one company, one large company. We have multiple customers.

They all very big. They call, what, Magnus, fixing seven, or eight, or whatever.

We won all the designs, and we're proven. We're one of the variable AI power supply.

Also, on the other end, we have all the capacities. We can deliver this year to our customers' needs.

I don't see why not. Only 50 percent.

We can be a lot more than that.

Maybe just one last thing to add is, Chris, you heard us talk about the drivers for growth, which was really around growing existing customers, adding new customers, seeing new platforms come to market, and then, of course, just server tailwinds. I think we always knew those were in place, and now we're just seeing some of the backlog to go along with it.

The only other thing I'd add, right, is we focus a lot on enterprise data, but I think we see strong data center demand, which has really also pulled through storage growth, optical modules, switches, and other areas we've talked about. I think overall we see strong data center demand through the end of the year.

Got it. Thank you.

All the best, Bernie.

Our next question is from Joe Quatrochi of Wells Fargo. Joe, your line is now open.

Thanks for taking the questions, and my congrats to Bernie as well. Thanks for all the help.

Maybe just to follow up on that, in the enterprise data and the increase in outlook, how much of that is related to traditional server CPU demand that it seems like is accelerating as well?

As I said, we have a lot of new design wins, particularly last year and a half. We see continuously changing, adopt our modules, and even changing from silicon to modules, and we see the trend.

With our power densities, we are winning the market.

I think to go back to part of your question, which had to do with the traditional, maybe CPU data center, the lines between AI, GPUs, and CPU are getting pretty blurry because they're so integral to one another these days.

They're using the same kind of power supply now.

Exactly. I would say that we've been trending very well in both categories.

I can talk to a trend line, but I can't really give you an absolute figure.

That's helpful. Then as a follow-up, as I think about just kind of like storage and compute and maybe the exposure to PCs, are you seeing anything related to just kind of memory prices increasing and just kind of maybe some pressure on some demand destruction around that part of the market?

Oh, you're talking about PC. The PC is a different animal than the data centers.

Meaning

new question is asking about memory and the constraints there, whether we're seeing that affect us.

Oh, memory constraints? Okay.

As I said earlier, we don't have constraints on the capacity side.

I think where you're going, Joe, as well, is also is there any demand destruction in PCs? I think as you looked at Q4 into Q1, remember we're coming off a very strong first half of 2025.

We expected that to be down a bit, as well as we are participating more selectively in the emerging parts of that business. I don't think we know how it's going to play out through the rest of this year at this point.

I don't think it's possible to say how that market might trend. We hear a lot of the same, but I think it's too early for us to tell.

Thank you.

Memory constraint on the PC?

Yes.

Oh, okay. I don't know.

We don't know the market. We don't know what our customer do.

We deliver what our customer ask. I care less.

Yeah.

Our next question is from Josh Buchalter of Cowen. Josh, your line is now open.

Hey guys, thank you for taking my question, and definitely want to echo the congrats and best wishes to Bernie after an incredible run and a long, sometimes strange trip. I very much appreciate the support over the year, and congrats and best of luck to Rob.

Maybe just to start, the incremental confidence in enterprise data is great to see, and it seems like you guys are suggesting you feel better about visibility there than you have in the past. Is that a fair read?

If so, is part of this it's just the market is maturing and scaling, and also just the capacity needs are so great? I was just hoping you could maybe speak to how visibility compared to maybe a year ago or something.

Thank you.

I think in prior quarters, I'd said that we've been experiencing a turnaround, much of which has been around the enterprise data, or more broadly AI markets, but that the anomaly had been that we'd been seeing very short lead times and that they were not putting a lot of backlog in our books. I'd say that the fundamental change that's also making us more confident right now is that we are seeing longer ordering patterns because some of our customers are concerned about capacity constraints, not necessarily with us, but just in general.

That's helpful, Collar. Thank you, Bernie.

The 40% non-enterprise data growth number for 2025 is obviously huge and above your historical algorithm of I think it was 10 to 15% above the analog industry. Is that still the right way we should be thinking about the non-compute exposed verticals into 2026 as well?

Thank you and congrats again.

I will try to manage your expectation. We're not going to say 26, we have a 40% growth.

These growths, we are still small players in the overall market compared to all the market size. Some growths, some years, we see the opportunities and we can grow better than the other years.

The long-term trend, or even short-term trend in 26, will grow.

Thank you.

Our next question is from Quinn Bolton of Needham. Quinn, your line is now open.

Hey, thanks for taking my question, and Bernie, it's been a great run, a great decade, thank you for all your help along the way. Welcome, Rob.

I wanted to ask, some of your competitors in the AI power space are talking about their businesses doubling in 2026, and I know your business and their businesses don't overlap 100%. There's different compositions.

My question is, do you guys think that you're gaining share as you look into 2026, broadly in the AI power segment?

Yeah. I refuse to get into a pissing contest, okay?

Who wins on the stage, okay? We let the numbers speak self.

As always, as our CIS IPOs, 21 years history, we never do that, okay?

I do think that we clearly have great products, broad engagement across the customers. We have design wins in a broad swath.

How the market then plays out remains to be seen, I think. I think we're very confident in our product portfolio and the engagements we have right now.

Got it. Then, Michael, some of the—

That's a much better smooth talk. That's much better.

As you said, we'll see where the numbers shake out at the end of the year. Michael, I wanted to ask too, you talked about sampling… You

probably will see much earlier. Okay.

Oh, good. We'll stay tuned.

I

wanted to ask you about the 800-volt solutions for 800-volt racks. Some of the participants in the market are suggesting NVIDIA and others are looking for GaN-based solutions.

I think you guys are offering a silicon carbide-based solution. Just wondering if you could talk about what you're seeing in the market.

Is there a preference for GaN or silicon carbide? Do you think there will be a mix of compound semiconductor solutions for that 800-volt to 12- or 6-volt stage in those 800-volt racks?

Yeah. Again, okay, and this is not a good venue to talk about technical terms, okay?

Actually, I'm happy to be a person who really knows the semiconductor device, and we are developing silicon carbide, okay? Ten years ago, I was wrong about GaN.

In the last few years, we developed our own GaN devices, okay? And 800 volts, since Tony is mentioning about it, and we are entering a pissing contest, okay?

That revenue is not for this year, not even for next year. Maybe end of the next year.

However, we are the first company to sample it. Now that's part of a pissing contest, okay?

And

again, we've done a good job and shown ourselves to be very adaptive changes to the market. Whether it turns out to be GaN or silicon carbide that is what's demanded, I'm sure that we'll be well positioned to take advantage of it.

Got it. Thank you.

Our next question is from Rick Schafer of Oppenheimer. Rick, your line is now open.

Thanks, and I'll just say, Bernie, it's been a genuine pleasure. You're going to be missed.

Michael, I just want to confirm for everybody that you're never retiring, right?

It happened to be today is my 86th earnings call. I'm looking for double.

Okay. Be serious, okay?

I enjoy this NPS immensely. We actually created this platform, everybody can maximize their capability.

The more interesting things to me is we company evolve, and we sell semiconductor power management. Now in the semiconductor, we're getting into MCU, we're getting into data converters, we get into even high-speed.

These are a few gigahertz stuff, and you will see the revenue zooms. On the overall market segment address, we migrate from silicon to systems, to a module to systems.

You will see a lot more. I enjoy this process a lot, and every year I'm a part of it, and I have my own product lines.

Thanks, Michael. That's reassuring.

Hey, I also just had a quick clarification, and then I've got a couple follow-ups. The clarification, Michael, you said earlier that the CPU and GPU and server are using the same power supplies now.

Does that mean that server CPU is already migrating to 48-volt?

Still they use mostly, okay? If they have some advanced high-price server or special servers, special need, they still use 12-volt.

I'm aware of some models use 48-volt. My guess is still small.

I'm not very clear on that. The majority still 12-volt, and now it's clear the module is the way to go if you want to improve efficiency.

Thanks for clearing that up. My first question really is on optical transceiver, because that's basically a brand-new product line, a little over a year old, I believe.

By our count, in our model, it's close to roughly 5% of sales exiting last year, I think now, which is a pretty remarkable ramp. I guess we're asking, what are your expectations for that business this year, and what does that imply for comms segment?

What are sort of the puts and takes within the comms segment?

I can comment on that, because we entered the module journey since 2016 or 2017. This happened to be the highest power density product on the market.

Then optical modules, they wanted that because they have limited rooms. In terms of the business, I don't know the details, maybe Bernie or Tony can answer it.

I'll just follow up. I think, Rick, we have obviously seen great growth in optical modules over the past year and a half.

I think the way we look at the market, very typical for MPS, is sort of interconnect. It's not just optical modules, but engagements for CPO, active copper, or other things as well, because the market will then figure out what interconnect technology is actually going to succeed over the long term.

We obviously don't guide by sub-end market, let alone sub-end market, but we would expect optical module to continue to grow as you start to see the 1.6 ramp as we go through, and for communications it should be an area of growth for us in 2026, both on optical modules and in switches, because that's where our data center switches are as well.

Thanks for that, and then if I can sneak in one on automotive. Obviously great year in '25, and I'm just curious what you see as the top drivers of segment growth this year.

I know you highlighted 48-volt and zonal, and I didn't hear you say much about ADAS, but I don't know if you can update us on how big ADAS is within that segment now, and if there's any way to quantify sort of the shift this year that you expect in potential content per vehicle.

Sure. I want to take a victory lap on 2025, where automotive grew 43% year

over year. That's only the beginning.

That's exactly the point here, is that what we saw in 2025 and is going to continue is that while ADAS certainly was a strong initial ramp, particularly in 23, 24, and 25, I think we saw a lot more diversification into other content opportunities on the automotive platform. As we look ahead here, keep in mind we're not necessarily driven by the SAR of the business, but our growth is dependent upon how fast our customers implement these new technologies, particularly as it relates to zonal and 48-volt.

Or even ADAS.

Or ADAS. And

the majority of cars on the market is nowhere, anywhere anything close to what Tesla does. Okay.

That's the car I drive. Okay.

I don't drive anymore. I think a majority of people still drive.

A large automotive company, they do things very slowly, much slower than Tesla does. Okay.

For features, up to this point, and actually the next couple years, I see our products provides the complete power supply chip sets, and also we have all these firmware, software. We're very much engaged with all the car makers.

I don't see why not, and that business is going to continue to grow.

Yeah.

You actually guys, you know how many cars shipped with ADAS, okay, which levels, and you can count NPS in it.

Rick, we're a little hesitant to probably call any numbers for the full year, just because there is a lot of macro uncertainty still. Great design wins, great engagement with tier ones and OEMs, but whether it's tariffs, whether it's the end of EV subsidies, or whether you even talk about what the impact on the auto market is from the memory shortage, I don't think we know.

I think we're a little hesitant to actually put a growth rate on it for the year.

Appreciate it. Thanks, guys.

Our next question is from Gary Mobley of Loop Capital. Gary, your line is now open.

Hey, guys. Thanks for taking my question, and Bernie, your retirement's well deserved and look forward to working with you, Rob.

I think everybody on the call would share the same sentiment that I have, that you're definitely one of my favorite CFOs. For my retirement gift to you, I wanted to throw you a big softball question, but I think it's an important topic.

Looking back over the past decade, when you've been CFO, you've outperformed the overall analog chip market, the overall voltage regulator market, consistently every year, and seemingly for different reasons each year. Thinking about the outperformance of the market in 2025, maybe if you can give us a sense of what drove that.

Was that just share gains in voltage regulator die, or was it something more substantial, like moving into data converters? Was it tied to the higher content associated with modules and related?

Can you give us some KPIs as it relates to sort of your module mix right now? Anything you can help us get a better understanding of that consistent market share growth.

Sure, Gary, and thank you for the kind words. They're appreciated.

When you look at the overall performance for the company in 2025, we had what had been our largest revenue end market in enterprise data had actually declined 2%, and yet overall the company grew 26%. Strategically, how we're differentiated from our competition is that we are represented with the best technology, the best services across all of the end markets that we service.

This is really just a reflection of our execution against that strategy over all of these years. It wasn't that, pardon my saying, we pulled a rabbit out of the hat.

We actually are able to adapt very quickly to changes in the market. That's what this is really a reflection of in our performance in 2025.

Thanks. As my follow-up, I wanted to ask about maybe some nuances in your increased visibility and comments regarding that.

If I talked to you guys three months ago, I think you were thinking maybe the 2026 year was going to be a little more second-half weighted, just given the stronger bookings that you've seen, the stronger order backlog. As you sit here today, would you say the shape of the year is a little more linear, less dependent on the second half?

I'd say that the first half for enterprise data in particular, but for the company, is more secure. I think there are still a lot of variables that need to be shaped before we really understand what the second half trajectory is going to look like.

Obviously, the initial signs that we saw from the ordering pattern in Q4 and continuing into this new year have been exceptionally positive. Now we have more of the high-level issue of trying to figure out what's real demand and what may be some double ordering on the part of our customers as they try to secure capacity.

As I said, that's a high-level issue, and we've shown that we can adapt to that as well as anybody with the performance we gave in late 2020 and early 2021.

Thank you.

We work with the customers, especially all these large data center customers very closely. They will give us very good lead times and forecast.

We have the capacities ready, okay, and we just meet their demand.

Thanks, Michael.

Our next question is from Tore Svanberg of Stifel. Tore, your line is now open.

Yes, thank you, and congratulations, Bernie. You're a class act, and I'm going to miss you tremendously.

My first question, Michael, I'm going to zoom in on the market, where the products, less content, which is storage and especially SSD, the power. It seems to be the CQ of the offset growth in business this year.

Maybe you can talk a little bit about the profile of that business. I think historically it's been more tied to client and HPCs.

Again, what's the company's position, SSE's offerings?

These are the power management and also the signal processors. These are all in the consortium driven by JEDEC.

Maybe Tony, you're a lot more familiar than I do.

And

we are part of it. DDR4, we don't have much business, okay, very little, and DDR5, okay, we are in DDR4, we're in under dining tables.

Before, DDR4 wasn't, okay. Now this business is ramping, okay.

Memories, okay, are shifting to DDR5, okay. We clearly see the volumes now, this last year and this year, and we're not stopping there.

We are migrating, we are expanding our product lines to the single side, and these are all in the memory modules.

I think there was a portion of your question as well about the non-DDR5 part of that business, sort of SSD and HDD. We have seen an uptick in that part of the business as well.

I think you're right. It's being pulled through much more by the enterprise than consumer these days.

That's why we generally talk about storage being data center driven inside of the storage and compute segment.

That's my follow-up, Michael Lisa is getting too forbilling capacity, looks like you maybe quite. Perhaps you could give us a little insight on what, has you from the specialization years, because you clearly don't need more forbilling.

Yes, we are very aware of that. As speaking, of course, and we're continuously expanding our capacity, and you know MPS history.

The worst thing is shutting customers down. Fortunately, we haven't happened in MPS.

Okay. Now it gets a little more complicated.

We established from the beginning of last year, we established our supply management chain, and this is not only for silicon, and not for semiconductors, okay, including silicon carbides and gallium nitrides and the materials, and we do all modules, or the module components. We established the supply chain management.

I think it's also quality. It's not everybody can play that game.

Every supplier can play the game. We go through heavy auditing.

Their standards, okay, they meet our standards. Ultimately, it's reflected into our margins.

The short answer is yes, we're expanding very fast.

Great, thank you. Congratulations.

Thank you.

Our next question is from Kelsey Chia of Citi Research. Kelsey, your line is now open.

Hi Bernie. Congratulations on your retirement.

Really appreciate the opportunity to work with you over the past year. I think, on my first question, with regards to the updated guidance for enterprise data, is there any market share gains assumption there, or is it just primarily due to industry growth?

Also, MPS has demonstrated strong execution and historically gained share during periods of supply constraints. Is it fair to assume that MPS could navigate any potential supply constraints and to take share in this environment?

Sure, and I think that I'd be doing a disservice to this conversation if I tried to break it down into a formula that says what's share gains or what's new business. I'd rather sort of respond a little differently, that this is a large market.

We talk about the top six, seven customers, and we're fully engaged with them in a strategic manner, where we're developing not just the release of the next generation, but the one beyond that. This also is a market with a long tail, and we're participating in the mid-market and the small size as well.

We're still very, very early in how this market's going to roll out and what our positioning's going to be. I think that we're as well positioned as anybody to take advantage of the market opportunity, but this is a long, long and very big story.

Yeah. I'm thinking about beyond AI, beyond enterprise data centers.

I'm not retiring. I'm thinking 10, 15 years ahead.

That's great. Continue the outperformance.

MPS outlined a gross margin target of 55 to 60%. Could you provide an update with regards to which end markets are currently above or below that corporate average, or outline some of the specific gross margin drivers in this

year? We're in the range, but on the low side.

I noticed that. Okay.

Let me add a little bit of color there. Michael said this earlier, when we look at all of the opportunities, we keep in mind what is the corporate model for gross margin, which is between 55 and 60%.

I've been fairly consistent over the course of the last four to six quarters when we've been trending at between 55.5 and 55.8, which is, Michael said, is the low end of our model, that in order for us to show improvement, we really need to have a little longer time horizon as far as backlog to be able to manage in it. We are starting to see a backlog developing, which I don't want to make too much out of one quarter's of experience, but we should be able to resume at some time during the year the cadence that we've historically shown of incremental, sequential improvements of maybe 10 to 20 basis points quarter over quarter.

Sounds good. Thank you.

Thanks, Bernie.

Our next question is from Jack Egan of Charter Research. Jack, your line is now open.

Great, thanks for taking the questions, and I'll echo the congratulations for Bernie and Rob. I had a bit of a technical one.

During last year's Investor Day, you mentioned a packaging innovation that would allow you to basically double the current density of your modules to about 3 amps per millimeter squared. I was just curious, are there any updates on that?

Is that still a work in progress, or is there kind of a timeline for that milestone?

We start to sampling those products, and we expect to have shipping in this quarter and next quarter. This quarter, yeah.

Those already qualified, and our customers are through qualification on it.

Got it. Great to hear.

Then kind from a higher level then, last quarter you talked a bit about the gross margin implications of moving from a silicon supplier to a system provider over the long term. I was a bit curious about the impact on opex as well.

Is that going to require you to kind of bring on new teams with experience in systems, or is there enough overlap between the chip design and system design processes that you can accomplish it organically, I guess? Any details on the impact to R&D dollars or SG&A leverage would be nice.

First things, first, okay? We only gain, not lose, okay?

I never believe big dollars, investments, and that translates to the bigger gain. That's bullshit.

Look at NPS. We're creating a few thousand, four to five thousand products, and I lost tracking.

We address the multiple segment of market. Why we can't pull up all these one plus one equals threes, okay?

Not just two anymore. We can pull up all these products, putting in systems, and we can provide higher values to end users, which doesn't mean we're building a refrigerator, we're building a TV.

We're building some things to alleviate our customers' design effort, manufacturing effort, and that give us a high ASP. I said earlier, we're second highest selling silicones, okay?

Why we can't just put all the silicon together and migrate to system levels, like modules, like system. You will see more and more.

At least I can say the net margins, net profit has increased. The company is going to be a lot more efficient.

I want to touch on something, that this transformation has been occurring now for well over 10 years. If you think about, we were pretty much completely an analog design house 10, 12 years ago, and then we've been able to migrate where we added both digital engineers and software engineers, and now we've had to take on new responsibilities and new skill sets related to packaging, and as Michael said, and testing.

Each time we've done this, we've maintained the same level of R&D efficiency of getting the most out of the dollars spent. Just changing to develop new skill sets around the new opportunities we've identified does not necessarily mean that it's going to get more expensive or it's going to compress our operating margins.

I just have one last comment. Even we made the model during Investor Day, Jack, that was fully aware of this transition, and so we talked about growing OpEx slower than revenue and giving some leverage to the model.

We knew this transition was happening when we put that guidance out there.

Yeah. Thank you all for all the color.

Our last question is from Sebastien Naji of William Blair. Sebastien, your line is now open.

Good afternoon and thanks for taking the questions. I'll just echo the best wishes for you, Bernie, in retirement.

My first question is really on the shift to vertical power solutions in the data center. As we move through 2026, what are your expectations for adoption of vertical power, and has that changed at all from your view in previous quarters?

Vertical power? Oh, that's a long...

everybody is going to vertical power, I guess. Those who don't, sooner or later they will.

This is just where the direction of the market, it's the only energy-efficient solution you can put in place if you're going to operate in these high-voltage

current.

That's just a natural evolution of the marketplace.

Got it. Do you think that starts to drive revenue in 2026 then?

Is that fair to say?

Oh yeah, yeah, yeah.

Okay. Great, great.

That's helpful. Then maybe just as a follow-up on your optical module business, I think you talked about this a little bit in a previous question, but as we think about this shift to co-packaged optics that's getting a lot more attention these days, how does that potentially change your revenue opportunity in optics?

Is it more revenue per port? Are the ASPs significantly higher?

Any thoughts on that?

Higher current, high density is always good for us. We're smiling, they increase power, and that's a lot more opportunity for us.

A higher level of integration.

Higher level integrations. Widen the competition gap.

I think the one thing I'd add there is, again, I think that's, again, for a long term. I don't think that necessarily moves the needle on 26, just to be sure, but it's certainly something we're engaged in over the longer term.

Got it. Makes sense.

Thank you.

This concludes our Q&A session. I would now like to turn the webinar back over to Tony.

I'd like to thank all of you for joining us today on this conference call. Our first quarter 2026 conference call will likely be held in late April.

Thank you and have a great day.