Ichor Holdings

Good day ladies and gentlemen and welcome to I-Corps first quarter 2026 earnings conference call. At this time all participants are in a listen only mode. Later we will conduct a question and answer session and instructions will be given at that time. If anyone should require operator assistance during the conference please press star zero on your telephone keypad. As a reminder this call is being recorded. I would now like to introduce to you Your host for today's conference, Claire McAdams, Investor Relations for I-Corps. Please go ahead.

Thank you, Operator. Good afternoon, and thank you for joining today's first quarter 2026 conference call. As you read our earnings press release and as you listen to this conference call, please recognize that both contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control and which could cause actual results to differ materially from such statements. These risks and uncertainties include those spelled out in our earnings press release, those described in our annual report on Form 10-K for fiscal year 2025, and those described in subsequent filings with the SEC. You should consider all forward-looking statements in light of those and other risks and uncertainties. Additionally, we will be providing certain non-GAAP financial measures during this conference call. Our earnings press release and the financial supplement posted to our IR website each provide a reconciliation of these non-GAAP financial measures to their most comparable GAAP financial measures. On the call with me today are Phil Barros, our CEO, and Greg Swite, our CFO. Phil will begin with an update on our business, and then Greg will provide additional details about our results and guidance. After the prepared remarks, we will open the line for questions. I'll now turn over the call to Phil Barros. Phil?

Thank you, Claire, and welcome, everyone, to our Q1 earnings call. Just a few months into a multi-year growth cycle and we are already delivering upside to our outlook and demonstrating strong earnings leverage. Q1 revenues of $256 million came in at the upper end of our expectations of 15% from Q4. Gross margins of 12.8% also approached the high end of our guidance, enabling us to more than triple our operating income versus Q4 and deliver our highest earnings per share in three years. The early investments we made in ramping labor headcount and prepositioning inventory are paying off. These are enabling I-Corps to deliver strong execution for our customers and achieve growth towards the high end of our demand forecast. Demand across our core markets has further strengthened since our last earnings call. Our visibility now extends deeper into 2026. Within this very robust demand environment, we expect I-Corps to be a top performer, both in terms of growth and earnings leverage. Our Q2 forecast now reflects unconstrained demand exceeding $300 million. This is one of the steepest ramps witnessed in I-Corps history, representing growth well over 30% in just two quarters. Not only that, but with stronger visibility since our last earnings call, we continue to expect every quarter in 2026 will be a growth quarter for I-Corps. We enter the year with increased momentum and a clear strategy. Our higher confidence today reflects I-Corps' critical role within the WFE industry and strong progress towards our strategic objectives. The technology transitions and strategic capacity expansions underway, largely in support of AI hyperscaling, favor etch and deposition applications, which favors I-Corps. A great example of this is the 30% increase in the number of process steps required to produce leading-edge logic with gate-all-around architectures. Increased investments in gate-all-around technology are significant tailwinds for I-Corps growth. Our objective is to gain share through this cycle, and the steps we have taken to pre-position inventory and ramp labor headcount will allow us to continue to perform for our customers, and this is how we will win. Turning to an update on our strategic initiatives we introduced last quarter, Q2 is shaping up to be a major step forward in our global footprint realignment. As a reminder, this initiative is aimed at driving three primary benefits. First, we are structurally eliminating the margin challenges we faced previously in order to drive stronger cross cycle performance and greater predictability in our business. Second, we are enabling more efficient, scalable, high volume manufacturing of our I-Corps branded products, which will get us to our cost targets for these components. Third, by driving higher level of I-Corps content within the systems we build, we will deliver significant improvements in gross margin flow through and earnings leverage as revenues ramp. We have made strong progress, and I'm proud of the team, especially given the scale of the ramp we are operating in. Just a few months into the year, and we have already installed and qualified half of the planned equipment moves, which is ahead of schedule. We are now performing all manufacturing steps for our substrate product line within the same four walls within Mexico. These are the types of efficiency gains that will structurally improve our product margins and drive higher gross margin flow through within the gas panel manufacturing business. In our valve product line in Q1, we achieved full customer qualification to manufacture in Mexico. This significantly expands our capacity for this product line, enabling us to source internally and cut our dependence on outside suppliers. We will continue to ramp up capacity through Q2 and expect to be at full production as we exit the quarter. The success and speed of both the moves and qualifications gives us the confidence to reinitiate valve qualifications on one of our major customers, which we had placed on hold due to capacity constraints. As we exit Q2, we will begin to see the gross margin impacts of our footprint realignment into Mexico, with these moves enabling increased levels of proprietary I-Core content in the gas panels we make. As we move through the remainder of the year, we will be ramping Malaysia, which will drive a richer mix of machining revenues. Driving higher volumes of machining revenues and completing cost reduction initiatives in our footprint realignment are the final two steps in achieving our near-term gross margin targets of at least 15%. As a reminder, while we complete the ramp-up of Mexico, we are temporarily increasing external supply to ensure strong, consistent delivery in our integration business. Taking all of this into account, today we are guiding Q2 revenues of approximately $300 million plus or minus $10 million in sequential improvement in gross margin from Q1 to expected range of 13% to 14%. Beyond Q2, we continue to expect approximately 100 basis points per quarter in gross margin expansion as we complete our transitions into the second half. This level of gross margin expansion continues to support our expectation that gross profit dollars will grow around twice the rate of revenues as we move through the second half. On today's call, I will reaffirm our stated target to exit 2026 delivering 35% I-Corps branded content within the systems we build. As a reminder, we exit 2025 delivering systems with 25% I-Corps branded content up from 15% in 2024. Our next step function increase in I-Corps branded content is in flow control, which is progressing the plan. We see 2026 as a qualification year with first meaningful flow control revenues in 2027. We expect that bringing the capacity online in both Mexico and Malaysia, along with flow control qualifications, will enable us to reach our goal to be capable of providing up to 75% of I-Corps branded content within the systems we build by year end. Finally, I will take the opportunity to reiterate our strategic priority to leverage our machining capabilities into high growth markets outside of semiconductor. This business represents less than 10% of our revenues today, but we anticipate this will grow at a rate faster than our WFE this year. Driven by number of key positions in commercial space and defense markets. To close, we have made significant progress on our strategic initiatives and all within a backdrop of rapidly growing demand. We remain confident that I-Corps is well positioned to capitalize on the ramp and deliver strong earnings leverage through this cycle. With that, I will now hand it off to Greg.