罗杰斯公司 (ROG) 2026财年第三季度业绩电话会：EBITDA利润率达20.2%lg...

罗杰斯公司（Rogers Corporation，纽约证券交易所代码：ROG）公布其2026财年第三季度实现全面增长和利润率扩张。各终端市场的营收均有所增加，调整后EBITDA利润率突破20%。在设计定型及数据中心开发项目的推动下，管理层对2027年的增长前景保持积极乐观。

核心要点

• 第三季度销售额同比增长9%至2.361亿美元，其中包括240万美元的外汇折算收益。
• 调整后每股收益（EPS）增长54%至1.39美元，创下该公司自2022年以来的最高单季调整后收益。
• 调整后EBITDA增长28%至4770万美元。调整后EBITDA利润率扩大300个基点至20.2%，达到2021年以来的最高水平。
• 所有终端市场的销售额均实现增长。汽车业务营收录得高个位数增长，航空航天与国防业务录得中个位数增长，电子与通信业务保持强劲增长。
• 对于2026财年第四季度，管理层预计营收为2.15亿至2.25亿美元，调整后EPS为0.90至1.10美元，调整后EBITDA为3700万至4300万美元。
• 管理层表示，新业务拓展进度超出了投资者日计划的预期，并预计增长态势将在2027年延续。

关键财务数据

销量增加和有利的产品组合是盈利提升的主要驱动因素。调整后运营费用的降低也有所助益，但大宗商品通胀以及新建中国陶瓷工厂的相关成本抵消了部分利好。

业务与运营表现

工业市场仍是罗杰斯最大的终端市场，占第三季度销售额的34%。在可再生能源及其他应用的支撑下，该领域营收同比小幅增长，各地区均实现适度增长。

汽车业务占销售额的24%，录得高个位数增长。管理层将这一增长归因于高级驾驶辅助系统（ADAS）强劲的需求，以及内燃机和电动汽车平台销售额的全面增长。

电子与通信业务占销售额的20%。无线基础设施用覆铜板电路材料的增长，足额弥补了智能手机相关销售额下滑的影响。

航空航天与国防业务占销售额的15%，录得中个位数增长，反映出国防和商用航空航天应用需求的上升。

罗杰斯获得了多个设计方案定型，包括用于无人机检测系统的覆铜板材料、用于电动汽车电池组的弹性体材料以及用于多种电动车型号的陶瓷AMB衬板。此外，某数据中心大客户选择公司的硅胶材料，以保护服务器托盘部件免受噪音和振动影响。

用于人工智能（AI）数据中心的高速数字材料和微通道冷却技术的研发工作仍在持续推进。管理层表示，客户正在测试第二代和第三代设计，送样与评估活动有所增加。罗杰斯还完成了热失控保护解决方案的对标测试，并开始向客户送样。其电磁干扰（EMI）屏蔽技术的初始送样计划于2027年初展开。

管理层业绩指引

受正常季节因素和客户年底运营模式影响，管理层预计第四季度营收将环比下降。航空航天与国防以及工业领域的销售额预计将实现同比增长。

毛利率指引的中点较2025财年第四季度高出150个基点。销量提升和成本结构改善预计将对利润率形成支撑，但大宗商品成本仍构成不利因素。按绝对值计算，调整后运营费用预计将小幅上升，但占销售额的百分比预计将改善100个基点以上。

管理层预计2027年将继续保持增长。提到的两个设计合作机会被描述为规模可观，预计将在2027年第二和第三季度贡献营收。其中一项已于2026年第四季度启动小规模量产，预计到2027年第二季度实现全量产。

对于公司的长期相邻业务机遇，管理层将数据中心列为最大的类别，以高速数字材料和冷却技术为首。汽车相关的电池技术位居第二，而EMI屏蔽技术可应用于数据中心、汽车和电子产品领域。管理层对此前公布的2028年机遇目标保持信心，并表示其内部目标是超越2030年的目标。

风险与关注事项

• 供应链限制导致部分第三季度客户订单延期交付，但管理层表示进入第四季度后需求和订单在手情况依然稳固。
• 大宗商品成本上升部分抵消了运营费用的节省，预计在第四季度仍将是对利润率构成压力的同比不利因素。
• 与新建中国陶瓷工厂相关的成本拖累了第三季度调整后EBITDA的增长。
• 由于季节性因素以及客户的年底运营模式，第四季度销售额预计将环比下降。
• 新的数据中心、电池安全及EMI屏蔽产品仍需视客户测试、资质认证、量产进度及商业化时机而定。

分析师问答环节要点

管理层表示，目前设计方案定型的推进速度快于投资者日上制定的时间表。公司此前设定的年均有机增长目标约为5%，而第三季度增长约为9%，第四季度指引的中点也在该水平附近。

在利润率方面，罗杰斯表示，随着销量的增长，更高的工厂利用率将带来额外的经营杠杆效应。公司已基本完成4500万美元的结构性成本改善，剩余的1300万美元预计将在2026财年末全面显现。预计在良率、原材料成本、吞吐量和生产力举措方面还将取得进一步成效。

罗杰斯计划在平衡有机投资和战略优先事项的同时，择机开展股票回购。管理层还在评估两个收购机会，并表明至少有一个可能会在未来几个季度内具备可行性。预计任何交易都将增强公司的战略能力，并在中长期带来有利的财务贡献。

管理层指出，尽管金融市场出现波动，但客户参与度并未放缓。相反，送样、测试和设计活动有所增加，特别是在数据中心解决方案领域。

业绩电话会议完整文字记录

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完整财报电话会议逐字稿

管理层陈述

Operator

Good afternoon. My name is Diego, and I will be your conference operator today. At this time, I would like to welcome everyone to the Rogers Corporation Third Quarter 2026 Earnings Conference Call.

I will now turn the call over to your host, Mr. Steve Haymore, Senior Director of Investor Relations.

Mr. Haymore, you may begin.

Stephen Haymore

Good afternoon, and welcome to the Rogers Corporation Third Quarter 2026 Earnings Conference Call. The slides for today's call can be found in the Investors section of our website, along with the news release that was issued earlier today.

Please turn to Slide 2. Before we begin, I would like to note that statements in this conference call that are not strictly historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and should be considered subject to the many uncertainties that exist in Rogers' operations and environment. These uncertainties include economic conditions, market demand and competitive factors. Such factors could cause actual results to differ materially from any forward-looking statement made today.

Please turn to Slide 3. The discussion during this conference call will also reference certain financial measures that were not prepared in accordance with U.S. generally accepted accounting principles. A reconciliation of those non-GAAP measures to the most directly comparable GAAP financial measures can be found in the slide deck for today's call. With me today are Ali El-Haj, President and CEO; and Laura Russell, Senior Vice President and CFO.

I will now turn the call over to Ali.

Ali El-Haj

Thanks, Steve, and thank you, everyone, for joining us today.

I will begin on Slide 4. We delivered another quarter of meaningful year-over-year improvement in our financial performance with higher sales across all end markets and stronger profitability and cash flow generation. Sales were $236 million, up 9% from the prior year. Adjusted EPS increased 54% to $1.39, the highest quarterly earnings since 2022. Adjusted EBITDA increased by 28% to $48 million or greater than 20% of sales. This result is the highest EBITDA margin achieved in the last 5 years.

Over the past several quarters, we have intensified our focus on deepening customer relationships, improving the speed of execution and implementing a more efficient operating structure. These results highlight the progress we are making. We also continue to advance our growth strategy. In our core markets, we secured new design wins during the quarter and the growth outlook remains positive. Across our high-growth opportunities, we made progress in several key areas: customer engagement and technical validation activities for our data center solutions continued, while our thermal runaway protection and EMI shielding programs achieved important internal milestones.

Looking to the fourth quarter, we expect continued meaningful year-over-year improvement. This includes approximately 9% revenue growth, 12% adjusted EPS growth and a 16% increase in adjusted EBITDA.

Turning to Slide 5. At 34% of third quarter sales, industrial is our largest end market. Revenue improved slightly compared to prior year with higher sales into renewable energy and other applications. Sales increased modestly in all regions. Automotive represented 24% of Q3 sales and increased at a high single-digit rate year-over-year. Growth was driven by improved demand for ADAS applications and stronger sales into both ICE and electric vehicle platforms. Electronics and communications accounted for 20% of sales in the quarter and continued to deliver strong growth.

Performance was driven by higher sales of laminate circuit materials for wireless infrastructure, which offset lower smartphone sales. Aerospace and defense represented 15% of Q3 sales and grew at mid-single-digit rate. The increase reflected higher sales into both defense and commercial aerospace applications. Overall, the breadth of the quarter's performance is encouraging. Sales increased across all end markets, reflecting a combination of improved demand, new program activities and continued execution against our commercial priorities.

Turning to Slide 6. We remain focused on accelerating growth by strengthening our position in core markets and applying our proven capabilities to high-growth adjacent opportunities. Within our core markets, we secured a number of new design awards in Q3. I will highlight a few. In aerospace and defense, our laminate material was designed into a drone detection system. Rogers' brand proven reliability, and localized support were deciding factors in the award decision. In automotive, our elastomeric materials were designed into a battery pack application with a leading EV manufacturer.

In addition, our ceramic AMB substrates were selected to be used in multiple electric vehicle models with a global auto OEM. The combination of our technology and technical service capabilities were key factors in the award decisions. In data centers, a major end user selected our silicone materials to safeguard sensitive components within the server tray. The materials combined high compressibility with superior noise and vibration isolation to help enable reliable performance.

Also in both AES and EMS, we secured meaningful design wins for energy storage system applications. These wins reinforce the value of our differentiated solutions and deep customer relationships. They support -- they also support our objective of achieving sustainable growth across the core portfolio. This growth will naturally lead to expected improvements in factory utilization levels, including for our ceramic business. In high-growth adjacencies, the development and customer testing of our signal integrity and chip cooling solutions for data center applications is continuing.

We continue to see strong pace and focus from customers sampling our laminate circuit materials for high-speed digital applications. Customer feedback remains positive on the performance of our materials to address rapidly emerging signal integrity challenges. Our microchannel cooler solutions provide an improved cooling technology to address rise in AI chip power density. Working with our lead customer, we have developed and tested multiple generations of prototypes with results continuing to validate the differentiated performance of our solutions.

These programs leverage capabilities where Rogers has established technical expertise and are designed to address increasingly demanding requirements in AI data centers. We completed benchmarking testing for our thermal runaway protection solution and are beginning customer sampling. This milestone moves us closer to commercializing a differentiated battery safety solution that combines our material expertise with deep application knowledge.

We are also advancing our EMI shielding technology. We have identified priority customers and applications and are developing solutions tailored to their requirements with initial customer sampling targeted for early 2027. Across these opportunities, our approach remains disciplined. We are prioritizing applications where our capabilities provide a clear customer benefit, and we are working closely with customers to advance qualification and commercialization.

I will now turn it to Laura to discuss our third quarter's financial performance and current quarter outlook.

Laura Russell

Thank you, Ali, and good afternoon, everyone. As Ali mentioned, we delivered strong year-over-year improvement in the third quarter with higher sales across all major end markets and meaningful expansion in profitability. We also generated strong cash flow, further strengthening our balance sheet and increasing our strategic flexibility.

Beginning on Slide 7, I'll review our third quarter financial results. Third quarter sales were $236.1 million, increasing 9% from the prior year period and including a $2.4 million benefit from foreign currency translation. AES sales increased 13.5% year-over-year with improvement across all end markets and particular strength in electronics and communications. EMS sales increased 4.3% versus the prior year, driven by higher sales in the automotive and aerospace and defense end markets.

Gross margin was 34.2%, up 70 basis points year-over-year.

The improvement was the result of higher volume and mix, partially offset by increases in commodity costs. Adjusted EPS was $1.39 and exceeded the high end of our guidance range. The 54% year-over-year increase in adjusted EPS resulted from strong sales, improved margins and favorability in the tax rate as we continue to improve business performance across all jurisdictions.

Turning to Slide 8. Third quarter adjusted EBITDA increased by 28% to $47.7 million from $37.2 million in the prior year quarter. Adjusted EBITDA margin of 20.2% of sales expanded 300 basis points to its highest level since 2021. The largest contributor to the increase was higher sales and improved product mix, which added approximately $11 million versus the prior year. Lower adjusted operating expenses also contributed to the improvement. These benefits were partially offset by higher year-over-year costs associated with the new Ceramic China facility.

We achieved meaningful operational improvement savings compared to the prior year, although these were offset by higher commodity costs. We continue to evaluate pricing adjustments depending on market conditions. Overall, the significant improvement in the quarter resulted from higher volume and favorable mix, together with continued discipline across our cost structure.

Continuing to Slide 9, I'll discuss cash utilization for the quarter. Cash and short-term investments at September 30 were $236.4 million, increasing $25 million from the end of the second quarter. Cash provided by operating activities was $41.4 million compared with $24.4 million in the second quarter, and free cash flow was $35.4 million. The increase in cash was driven primarily by adjusted EBITDA of $47.7 million, partially offset by $6 million in capital expenditures, a $3.6 million increase in working capital and $4.6 million of cash taxes paid. We repurchased $9.3 million of shares during the quarter.

We will continue to balance returning capital to shareholders with investments in organic growth and other strategic priorities. Our strong cash position and balance sheet provide us with increased strategic flexibility as we evaluate opportunities to support long-term growth and shareholder value creation.

Next, on Slide 10, I'll discuss our guidance for the fourth quarter. From a top line perspective, we continue to see positive momentum with sales expected to increase 9% year-over-year at the midpoint of our guidance. Consistent with normal seasonality and customers' end-of-year operating patterns, sales are forecasted to decline sequentially. We are guiding Q4 revenues to be between $215 million and $225 million. The guidance includes an expectation for year-over-year growth in aerospace and defense and industrial end markets. We're guiding gross margin in the range of 32.5% to 33.5%.

The midpoint of the range is 150 basis points higher than the prior year. We are realizing improved margins due to higher volumes and our cost structure improvement actions, although higher commodity costs will continue to be a headwind versus Q4 of 2025. We expect Q4 adjusted operating expenses to increase modestly year-over-year, while improving by more than 100 basis points as a percent of sales. Adjusted EPS is forecasted to range from $0.90 to $1.10. The dollar midpoint compares to adjusted EPS of $0.89 in Q4 of 2025.

The increase versus the prior year is a result of the expected increase in sales and gross margin, partially offset by higher tax. Adjusted EBITDA is anticipated to range from $37 million to $43 million. This equates to a 16% increase versus the fourth quarter of 2025 at the midpoint of the range. Lastly, we project our non-GAAP full year tax rate to be approximately 31%.

In summary, our fourth quarter outlook reflects continued year-over-year improvement in sales, adjusted EPS and adjusted EBITDA margin as we execute our commercial and operating initiatives.

I will now turn the call back over to Ali.

Ali El-Haj

Thanks, Laura. In summary, we delivered strong year-over-year improvement in the third quarter with growth across all end markets, adjusted EBITDA margin above 20% and adjusted EPS reaching a multiyear peak. We remain focused on sustaining this financial progress while accelerating growth. Our strategy is centered on leveraging Rogers' proven capabilities and deep customer relationships to grow in core markets and advance high potential adjacent opportunities. With disciplined execution and a healthy balance sheet, we believe we are well positioned to translate these opportunities into stronger earnings and shareholder returns.

That concludes our prepared remarks, and I will now turn the call back to the operator for questions.

Operator

[Operator Instructions] And your first question comes from Daniel Moore with CJS Securities.

分析师问答

Dan Moore

Congrats on, obviously, a very solid quarter. Great to see top line growth high single digits, approaching 10%. Still actually a touch below the midpoint of the guidance. So wondering if there were areas where -- or pockets of sales that were maybe pushed out to some degree. Wondering if the quarter could have potentially come in even stronger? Maybe just talk to those areas that weren't quite as strong in terms of organic growth in the quarter.

Laura Russell

Dan, it's Laura. I'll start and then we can pass to Ali if there's any additional comments. And so yes, you're right, there was a slight miss to the midpoint of the guide, a couple of million dollars there. As with every quarter, we work to balance our supply against the demand that we're seeing. And with everything, there are some constraints generally speaking, in the market at the moment, which we, like probably many other vendors had faced. So what I would suggest is, yes, there was some pushout occurred in a couple of spaces. But in other areas where we did have supply with the strong demand that we have, we work to mitigate and manage accordingly.

What I would also point to is what you can see is in the guidance for the fourth quarter, we're seeing consistent strength in the demand and the order book. And you can see at the midpoint of the guidance there, that's also going to be up about 9% on a year-over-year basis. So generally speaking, yes, there were pockets of supply limitations. We work to balance it, and we're continuing to execute solid growth in the third quarter of what we posted and in our guidance midpoint for Q4.

Dan Moore

No, that's really helpful, Laura. And margin improvement even more impressive given those constraints. Maybe a follow-up for me, just elaborate really good color on the new design wins in the quarter. Can you -- is there anything you can say in terms of either size of the opportunities or timing of when you might expect some of those to start generating meaningful revenue and what a ramp looks like? Any color on those would be great.

Ali El-Haj

Yes. Thanks, Dan. This is Ali. Both actually, 2 of the opportunities that we've mentioned, they are material. So they are sizable, and we expect revenue on -- from both of these, I believe, Q2 and Q3 of 2027. One of them actually started in a slow ramp-up started in -- it was started in Q4 of this year, and it will continue to ramp up what we expect to see full volumes by Q2 of next year.

Operator

And your next question comes from David Silver with Freedom Capital Markets.

David Silver

Yes. I did want to ask a question about margins overall and -- or margin progression overall. And looking at my quarterly -- the quarterly income statements for, let's say, the first 3 quarters now of 2026, I'm going to be a little vague here or a little imprecise. But your revenues have jumped up about 18%, but your overall spending for SG&A and R&D together looks pretty flat. In other words, you've grown your sales while your fixed costs more or less are flat. And as a result, change in sales over change in EBITDA works out to, again, imprecise, but close to 50%.

So is this kind of the standard model? Or are these assumptions kind of what you're looking at as we move forward into 2027 and beyond? Or was there 1 or 2 issues that might have made the data look unusually flat or the numbers fell in line like they did? In other words, should we just assume flat SG&A and R&D, and maybe a 50% incremental type of EBITDA margin on incremental sales going forward?

Laura Russell

David, let me start and we can build on my response. So I think we are actually being very intentional in managing our investments in our OpEx and in our factories and our fleet around servicing the demand and the potential opportunities that we have in managing the investments accordingly. So the OpEx levels that we're currently posting are intentional. There isn't anything there that we are underinvested in relative to the opportunity. But what we indicated and guided when we presented an Investor Day last month is the fact that we will anticipate in absolute terms, some growth in those investments as we chase the significant opportunities that we believe we have exposure to both organically or primarily organically from the OpEx perspective. And so we will do that.

And you started your question on the margin piece. What we'd say there is you can see as we're leveraging the factory footprint that we have in servicing our customers in region, you can see that we are benefiting from the scale and the utilization benefits through the fleet and the margin as we're balancing mix against that utilization. So generally speaking, yes, I would say, you're going to see the fall-through as we continue to execute our growth objectives and continue to modulate and manage our investments and our investment profile aligned with our levels of confidence and security around the top line expansion.

David Silver

Okay. Great. Next question I had maybe for Ali. And thank you very much for all the qualitative color around new business wins. I was hoping to maybe just drill down a little bit more. But is it your view that the level of new business wins is sufficient to kind of meet or exceed those targets that you laid out at your recent Investor Day?

In other words, the growth trajectory up to, let's say, mid-2027 or so when some newer opportunities are supposed to go -- begin commercial sales. But just maybe a little bit of color on whether the pace of new business wins that you cited in your remarks are consistent with what we saw a few weeks ago.

Ali El-Haj

Thanks, David. I think the simple answer would be yes. They are consistent. As a matter of fact, we are probably ahead of schedule in wins and securing more new business. And the growth that we're projecting right now is ahead of the average that we indicated. We indicated organic growth of about 5% per year during our Investor Day. And now we're -- it was about 9% in Q3, 9% in Q4, and we expect that growth to continue in 2027.

Operator

Your next question comes from Rebecca Zamsky with B. Riley Securities.

Rebecca Zamsky

Yes. This is Rebecca on for Craig Ellis. So at the Analyst Day a few weeks ago, the team identified 3 factors that contribute to gross margins, which I believe were volume and absorption, differentiated pricing and continued cost and operational improvements. Could you update us on the progression of those 3, like, parts?

Laura Russell

Yes. I'll start, Rebecca. So yes, you're right in terms of the 3 critical drivers of our gross margin expansion. So as Ali just said to David, we're seeing positive traction in our design activity and the volume, in fact, we're seeing on the designs that are already won and in volume production. So that has given us some favorable indications about the first lever of that margin expansion because it's going to be predicated on the volume that will allow us to improve our utilization through the factory.

Secondly, you've heard us talk about structural cost improvements that we had undertaken over the last probably 24 months in sizing the factories and ensuring that the factories were supplying our customers where the customer demand was. And we've concluded on those restructuring activities. So that's the $45 million you've heard us reference historically. And it's basically effectively largely done, absent $13 million of the $45 million isn't fully crystallizing in the 2026 results. But as we exit the year, it's all fully achieved.

In addition to that, we continue to focus on operational excellence initiatives to ensure that we're optimizing our yield, minimizing our input costs and getting our maximum throughput and productivity of our factories, which those initiatives are going well. You've heard Ali say historically that we're not yet fully concluded. There's still room and opportunity there, but that remains a continued focus from our global operations teams on a week-to-week, day-to-day basis.

And then thirdly, you mentioned the pricing. What we're talking about there is not pricing, but differentiated solutions with the new opportunities that we're chasing. So that's key in a strategic initiative, and those programs are progressing...

Operator

And your next question comes from Daniel Moore with CJS Securities.

Dan Moore

Maybe one on capital allocation and one on the longer term. But cash flow, obviously, really strong. Cash continues to build despite increasing share repurchases. Do you expect to continue to be more aggressive in terms of buybacks at or near current levels? And in a similar vein, maybe just talk to the M&A pipeline and whether you see opportunities that could come together over the next 2, 3, 4 quarters?

Laura Russell

Yes, Dan, I'll start again. So yes, you saw us $9 million of share repurchases last quarter. Yes, we'll be opportunistic there. We'll evaluate what's in the funnel and the current pricing and do what we deem appropriate for adding value to our shareholders. And as we've shared in Investor Day and in prior calls, we are much more active in our M&A funnel and our activities there these days. And I think Ali will probably talk about evaluation and whatnot.

Ali El-Haj

Yes. We have a couple of opportunities, Dan, that we're looking at right now as we speak. We hopefully -- we anticipate some -- at least one, maybe both of these opportunities are actionable within the next few quarters or so. So we're active. We're evaluating the things, again, based on the criteria that we established in Investor Day and we continue to do that. And we expect to, like I said, some actionable announcement probably within the next couple of quarters or so.

Laura Russell

And consistent with what we said, Dan, that would be something that was strategic, add capability that we don't have and that has a favorable financial contribution, at least over the mid- to long term. So everything will go through appropriate diligence.

Dan Moore

Excellent. Maybe just one more, and this is a bigger picture kind of longer term. But just hoping to dig into a little bit more on the long-term goals. Looking at the 3 major opportunities, growth opportunities, data centers, battery tech, EMI shielding, collectively, we're looking, I think, at $100 million of revenue by 2028, growing to $450 million by 2030.

Just talk to your expectations regarding the relative size of each of those and how we're thinking about sort of the relative cadence of ramp. I know it's fluid, but wondering if you could maybe delineate at all between what's sort of near term and what's larger in terms of magnitude of the opportunity over the time frame?

Ali El-Haj

Yes. We're -- as you know, we're being vague about detailing the opportunities. But clearly, data center is our largest of the 3. That's for sure. And from a product standpoint of view, if you look at the 2, whether it's high-speed digital or cooling, these are the 2 that we probably the largest of the data center opportunity. So data center within the 3 is the largest. High-speed and cooling will be the largest opportunities within the data center itself.

So without quantifying this put in dollars, obviously, we do have detail internally here what our expectations are, and we're working towards those expectations. Our elastomeric materials also will participate. As a matter of fact, one of the opportunities that we've mentioned that we already obtained a design win, and we're currently launching that is for a data center, and it's one of the elastomer materials that we're -- we supply today. It's one of our silicones here. So that's the expectation.

Automotive probably would be the second within that -- within the 3. And then when it comes to EMI shield, obviously, that goes across all product lines, including data centers, automotive and electronics. So from a timing standpoint of view, again, our expectations remain the same, second half of next year with Q3, Q4 where some of these products will launch. Again, we go through a ramp-up phase. '28 still we're confident in the numbers that we presented at Investor Day that we will hit those numbers. And 2030, our objective internally is to beat those numbers. So that gives you probably an idea about our confidence level here.

Operator

And your next question comes from David Silver with Freedom Capital Markets.

David Silver

Dan touched on a couple of points in general that I was going to follow up on. I'd like to ask Ali, about maybe the tone of -- the tone or the optimism of your customers. In other words, I think of your company as a solutions provider, but you're still reliant on customers wanting to move forward on new investments and new platforms, et cetera. Just in the last few weeks, I mean, I would just say equity markets in some high-growth subsectors have been quite volatile and interest rates remain elevated compared to a couple of years ago.

How would you say the engagement is with customers relative to when we last heard from you at the Investor Day? Has there been any dampening or caution -- incremental caution from your key customers? Or is there any change on the collaboration schedules? Or from your perspective, is it still pretty much business as usual despite, let's say, the financial market volatility that a lot of those companies operate in?

Ali El-Haj

Yes. Actually, thanks for the question. Actually, it's the opposite in our case here. We see the momentum is picking up. More activities are ongoing actually. We see more intensity in those activities. And we're providing more samples. Customers are building more product for testing and evaluation. And as I mentioned on the prepared remarks, we're on third generation -- second and third-generation designs and upgrades and optimization of these products. So from an activity standpoint of view, no, it's actually increasing, which is expected as we get closer to winning those and design-in announcement, you expect that those activities will increase and intensify.

So that's what we're seeing now. And we're expanding actually to more customers. So we don't really see a slowdown. Again, because we -- exactly what you said, we are providing solutions to customer needs today. They need those type of solutions, and we're providing those solutions. So we don't see any impact from the macroeconomics that we see out there today. I think our forecast and our expectations remain the same.

Operator

Thank you. And thank you, everyone, for your questions. That concludes today's conference. You may disconnect your lines at this time. Thank you all for your participation.

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