Corning Incorporated

we have transformed the financial profile of our company. We expanded operating margin by 390 basis points to 20.2%. We grew EPS 85% to 72 cents and we expanded ROIC 540 basis points to 14%. We also nearly doubled free cash flow in 2025 to $1.72 billion from $880 million in 2023. In total, we now have a highly profitable launch point for future growth. And excitingly, we have even stronger long-term growth ahead. Today, we are upgrading our original springboard plan to now add $11 billion in incremental annualized sales by the end of 2028, up from our original $8 billion. So we feel great about our position entering 2026. In quarter one, we expect year-over-year growth to accelerate with core sales up approximately 15%. to a range of $4.2 to $4.3 billion. Looking at 2026, our internal springboard plan now adds $6.5 billion in incremental annualized sales by the end of the year up from our previous $6 billion plan. And our high-confidence springboard plan now adds $5.75 billion up from our previous $4 billion plan. Quite simply, our strategies are working. We're seeing remarkable demand for our innovations and manufacturing capabilities, and we see a larger, long-term growth opportunity through 2026 and beyond. Recently secured customer contracts, including the one we just announced with Meta, only increase our confidence. We've been getting a lot of questions about the Meta agreement from our investors. So before I talk about Springboard in more detail, let me take a moment to outline the key elements. Just yesterday, we announced that Corning and Meta announced a multi-year, up to $6 billion agreement to support Meta's apps, technologies, and AI ambitions using our newest innovations in optical fiber, cable, and connectivity solutions. This long-term partnership with Meta reflects our commitment to develop, innovate, and manufacture the critical technologies that power next-generation data centers here in the U.S. Together with Meta, we're strengthening domestic supply chains and helping ensure that advanced data centers are built using U.S. innovation and U.S. advanced manufacturing. Meta will serve as the anchor customer for the expansion and upgrading our manufacturing and technology capabilities across our operations in North Carolina. We are concluding similar long-term agreements with other major customers to dedicate capacity for them as well. Taken together, these agreements enable Corning to provide our customers with secure U.S. origin production of our most advanced Gen-AI high-density innovations. Now, we're also seeking to appropriately share the cost and risk of such expansions with our customers, and we structure our agreements accordingly. These structures include components like customer prepayments and stringent long-term customer commitments to provide revenue assurance. For long-time followers of Corning, you would recognize the model is quite similar to our extremely successful Gen 10.5 agreements with our display customers, and most recently, Apple's $2.5 billion commitment to produce 100% of iPhone and Apple Watch cover glass in our Kentucky facility. Basically, we're taking the proven approach in our glass businesses and applying it to optical communications. As a result, we will serve our customers, grow organically, and share risk appropriately so that we can deliver the strong returns for our investors that are outlined in our springboard plan and underpin our upgraded plan. So now let's talk more about the springboard upgrade. I'll start with the basics of the plan. When we introduced Springboard in Q3 2023, we used this chart to explain our incremental sales opportunity using our Q4 projected sales of $3.25 billion as the starting point, which put us at a $13 billion annualized run rate. The Y axis represents incremental annualized sales above our Q4 2023 run rate. And the x-axis represents time for the following five years. Now let's fill in some numbers. Here's our original internal non-risk adjusted plan, which reflected potential growth of $8 billion in annualized sales run rate by the end of 2028, with $5 billion by the end of 2026. We took this opportunity and translated it into a high-confidence plan to help inform investors. To do that, first, we focused on a three-year time frame. Second, we probabilistically adjusted for different potential outcomes in each of our market access platforms, including market dynamics, timing of secular trends, successful adoption of our innovations, as well as volume, pricing, and market share costs all of our business, and of course, the potential that some of our markets may go through down cycles. We purposely drew this as a wedge. We weren't trying to guide every quarter for the next 12 quarters. We said it obviously won't be a straight line, but we were also not dealing with a hockey stick when we built the plan we expected to see strong growth early. And we did. In March of last year, we upgraded our internal and high-confidence plans by $1 billion to add $6 billion and $4 billion, respectively. So as I previously noted, we made excellent progress and achieved our upgraded high-confidence sales target a full year ahead of plan, adding $4.6 billion of incremental annualized sales since the launch of Springboard. As you can see, we are also performing well against our internal plan. As we look ahead, we expect our strong momentum and progress to continue. Of course, at its core, our Springboard plan was about more than our ability to grow organically. It was about enhancing our profitability base. We provided you with one metric to track our progress, an operating margin target of 20% by the end of 2026. And as we executed springboard, you can see that we expanded our operating margins significantly. In the fourth quarter, we achieved the 20% target a full year ahead of plan. This is just one example. of how significantly we have transformed the financial profile of the company over the past two years. To illustrate my point, let's compare a snapshot of key metrics at the launch of Springboard versus today. In just two years, we've grown sales 35% to $4.4 billion. We've improved operating margin by 390 basis points to 20.2%. Grown EPS, 85% to 72 cents. Expanded ROIC, 540 basis points to 14.2%. And for free cash flow, let's look at full year numbers. In 2025, we delivered $1.72 billion, and that's almost double what we delivered in 2023 in total. the first two years of Springboard has simply been a tremendous success. We established a new base from which to launch another round of strong, more profitable growth. And that takes us to our upgrade. Let's look at the highlights of the sales growth we now anticipate having completed our recent planning cycle. First, As I showed you, our original springboard plan added $8 billion incremental annualized sales to 2028. We are upgrading our internal plan to now add $11 billion in incremental annualized sales. This represents a double-digit growth rate from the quarter we just closed through the end of 2028. This upgrade also impacts this year. Our internal plan now adds $6.5 billion in incremental annualized sales by the end of 2026, up from the previous $6 billion plan. Our high-confidence plan now adds $5.75 billion in sales by the end of 2026, up from the previous $4 billion plan. You will note our increasing confidence in delivering our growth objectives. Two years into the three-year plan, we've hit key milestones and advanced strategic initiatives like our announcements with Meta and Apple that increase our probability of success. We feel really good about our performance going into year three of Springboard. To wrap things up this morning, as we mark the second anniversary of Springboard, The plan has clearly been a success. We've transformed the financial profile of our company and we've established a powerful base for future growth. Excitingly, we are now pursuing an even larger growth opportunity on that enhanced profile with significantly higher returns. We feel great about our position as we enter 2026 and this morning, We wanted to make sure that we shared our new top line growth numbers with you because it's such a significant upgrade. How we'll get back to you in the coming months to do a more detailed review of our upgraded springboard plan. We would like your input and ideas on the most helpful way to portray the plan and the associated metrics. It's really so interesting, isn't it? Here we are celebrating our 175th birthday as a company this year. A feat so few companies ever attain. I think it's pretty cool that we're on this exciting journey from our original springboard launch at the end of 2023 to essentially doubling the size of the company. in the coming years. So thank you for joining us in this exciting hour of Corning's history. I'm really looking forward to continuing the dialogue and updating you on our progress. Now let me turn things over to Ed for more detail on our results and outlook. Ed.

Thank you, Wendell. Good morning, everyone. In the fourth quarter, we delivered outstanding results that not only capped off a record year, but also illustrated the tremendous success of our springboard plan to date. So this morning I will provide details on our performance, our upgraded springboard plan, and our approach to capital allocation. Let's start with our results. Year over year in Q4, sales grew 14% to a record $4.4 billion. EPS grew 26% to 72 cents. Operating margin expanded 170 basis points to 20.2%. ROIC grew 150 basis points to 14.2%. And we delivered strong free cash flow of $732 million. We delivered both our high confidence sales plan and our operating margin target of 20% a full year early. For the full year, we grew sales 13% to a record $16.4 billion. EPS grew more than twice as fast as sales at 29% to $2.52. Operating margin expanded 180 basis points to 19.3%. and we delivered strong free cashflow of $1.7 billion. Turning to our business segments in optical communications, Q4 sales were $1.7 billion up 24% year over year. Net income was $305 million up 57% year over year and net income margin was 18% for the full year. Sales were $6.3 billion of 35% year over year. Net income was a billion dollars of 71% year over year. The majority of growth in optical was driven by the outstanding adoption of our new GenAI products. For the full year, our enterprise business where we capture sales for inside the data center grew 61% year over year. and the hyperscale data center portion of our business grew significantly faster. We also saw year-over-year sales growth in our carrier networks business, which was up 15% for the full year. This growth was primarily driven by sales to interconnect data centers. The growth we are seeing in optical communications is an important component of the springboard upgrade we are providing today. We expect this segment to continue to drive significant growth. Our recent meta announcement is a great proof point. Moving to display, fourth quarter sales were $955 million and net income was $257 million. For the full year, we provided a target for net income in the range of $900 to $950 million and net income margin of 25%. We exceeded both goals this year, delivering $993 million of net income and a net income margin of 27%. Looking ahead, In the first quarter, we expect the glass market and our volume to be down mid single digits sequentially in line with normal seasonality. As a reminder, we successfully implemented double digit price increases in the second half of 2024 to ensure we can maintain stable U.S. dollar net income in a weaker yen environment. We've hedged our exposure for 2026 and we have hedges in place beyond 2026 through 2030. We continue to expect to deliver annual net income of $900 million to $950 million with net income margin of approximately 25% consistent with the last five years. Turning to specialty materials, The business delivered a strong fourth quarter with sales up 6% year over year to $544 million and net income up 22% to $99 million. For the full year, we outperformed end markets with sales growing 10% to 2.2 billion and net income growing significantly faster at 41% to $367 million. Results were driven by increased demand for premium products and growth in our Gorilla Glass solutions business, with industry-leading flagship devices featuring our latest cover materials. Looking ahead, we expect our more corning content approach to increase demand for our innovations and manufacturing capabilities, and we anticipate significant growth in this segment as part of our upgraded springboard plan. Our expanded partnership with Apple creates a larger, longer-term growth driver. And we continue to innovate and advance the durability of our products to offer consumers industry-leading glass solutions for mobile device applications. A great recent example is the new Samsung Galaxy Z tri-fold a multi-folding device designed with our ultra-thin bendable glass solution on the interior, Gorilla Glass Ceramic 2 on the exterior, and camera lens covers featuring Gorilla Glass with DX. Turning to automotive, segment sales of $440 million were down slightly year-over-year in Q4, and for the full year were down 3%. The heavy duty diesel market in North America and Europe remained weak. Net income of $63 million was up 3% for the full year. Net income was up 7% driven by strong manufacturing performance. For 2026, industry analysts forecast light duty vehicle production to be flat to down slightly and for the heavy duty market to remain flat. We remain focused on executing our Moor Corning growth strategy in automotive as additional content is required in upcoming vehicle emissions regulations and as technical glass and optics gain further adoption in vehicles. Turning to life sciences, full year sales of $972 million were consistent with the prior year and full year net income was $61 million. Finally, Hemlock and emerging growth businesses Q4 sales were $526 million, up 62% versus the prior year, driven by growth in polysilicon and module sales for the solar industry. Q4 net income of $1 million was down year over year. As we have shared with you, we are ramping capacity to make additional polysilicon wafers and modules to build a much larger solar business. The cost of that ramp is the primary drag on net income. As a reminder, we plan to build solar into a $2.5 billion revenue stream by 2028 with profitability levels at or above the Corning average. Now let's turn to our outlook. For the first quarter, we expect year-over-year growth to accelerate with sales growing approximately 15% year-over-year to a range of $4.2 to $4.3 billion. We expect EPS to grow significantly faster at about 26% to a range of 66 to 70 cents. As was the case in Q4, our Q1 guidance includes the continued temporary impact of our solar ramp of approximately 3 cents to 5 cents as we continue to bring up capacity to meet committed demand. We expect our sales to increase and our profitability to improve as we move through the year. For the full year, we expect capital expenditures to be about $1.7 billion, a few hundred million dollars above our depreciation level. Even with that, we expect to generate significantly more free cash flow year over year while continuing to invest strongly in our growth vectors aided by customer financial support. Stepping back, as we mark the second anniversary of Springboard, the plan has been a tremendous success. Over the last two years, we fundamentally transformed the financial profile of the company. From Q4 2023 to Q4 2025, we expanded operating margin by 390 basis points to 20.2%, grew EPS 85% to 72 cents, and expanded ROIC 540 basis points to 14.2%. We also doubled full year free cash flow to $1.7 billion in 2025 versus the year of 2023. We are operating from a much stronger profitability base. You see the margin and cash improvements already reflected in our fourth quarter 2025 results. Additionally, you just heard from Wendell that we are upgrading our springboard sales plan. Our internal plan now adds $11 billion in incremental annualized sales by the end of 2028, up from our original $8 billion plan. To put this in perspective, when we started SpringBoard in Q4 2023, our annualized sales run rate was $13.1 billion. Delivering our internal SpringBoard plan puts our annualized sales run rate at $24 billion by the end of 2028. we almost double our sales run rate over this time period. Importantly, the combination of stronger sales growth with a dramatically enhanced financial profile will result in much more cash generation. We are also upgrading our internal and high confidence plans for 2026. Our internal plan now adds $6.5 billion in incremental annualized sales by the end of 2026, up from our previous $6 billion plan. And our high confidence plan now adds 5.75 billion in incremental annualized sales by the end of 2026, up from our previous 4 billion plan. We've significantly closed the difference between the high confidence and internal plans because of our increased visibility, the success of new products and customer commitments to our innovations. One thing I'd like to note is that we are not changing our operating margin target at this time. We developed our original target to build an exciting, highly profitable platform to support higher growth returns on our innovations. At this level of profitability, we would be delighted with more growth. Our target is to continue to be at 20% or above on operating margin. And to help you with your modeling, we'll handle profitability expectations through our normal guidance process. We expect to share more with you about our upgraded springboard plan in the coming months. And since our upgraded plan will generate higher cash flows, I want to take a moment to share our approach to capital allocation. We prioritize investing in organic growth opportunities that drive significant returns. Overall, we believe this approach creates the most value for our shareholders over the long term. And our investors have confirmed they see the value in this approach. So for the larger growth opportunity in our upgraded springboard plan, we need to invest. As we invest, we will use a variety of tools to share the cost and risk with our customers, including customer prepayments and stringent long-term customer commitments to ensure we generate strong returns on our investments and secure our planned cash flows. We also seek to maintain a strong and efficient balance sheet. We're in great shape. We have one of the longest debt tenors in the S&P 500. Our current average debt maturity is about 21 years, and we have no significant debt coming due in any given year. Finally, we expect to continue our strong track record of returning excess cash to shareholders. We already have a strong dividend. Therefore, as we go forward, our primary vehicle for returning excess cash to shareholders will be share buybacks. We have an excellent track record. Over the last decade, we repurchased 800 million shares, close to a 50% reduction in our outstanding shares. Because of our growing confidence in Springboard, we started to buy back shares again in the second quarter of 2024, and we have continued to do so every quarter since then. and we expect to continue buying back shares going forward. Now, before we move to Q&A, we just reported quite a lot of news. So let me reiterate the key takeaways. First, our current performance is outstanding. We delivered fantastic results for 2025, and we enter Q1 with exciting momentum and accelerating growth. Second, over the first two years of Springboard, we fundamentally transformed our financial profile, establishing a higher profitability base from which to grow going forward. And third, we now see an even larger growth opportunity. Therefore, we just upgraded our springboard plan in both the near term and longer term. Because of our improved financial profile and higher growth expectations, we expect to generate significantly more cash as we go forward. creating a very compelling plan for shareholder value creation. I look forward to engaging with you to discuss our upgraded springboard plan in more detail, to get your input on the most helpful way to portray our plan, and, of course, to update you on our progress. Now, before we move to Q&A, I'm going to turn it back to Wendell for a moment.

Thanks, Ed. I want to let everyone know that our beloved head of investor relations, Ann Nicholson, will be retiring after 40 years of exceptional service to Corning. Now, I first met Ann when she was a young process engineer and I was a shift supervisor almost 39 years ago. We have followed each other through many roles in subsequent decades. My personal favorite was she was my supervisory effectiveness instructor a long time ago. So, Ann, thank you for my success as a supervisor. More importantly, Ann, thank you for being such a good friend and advisor and trusted colleague. And most importantly, thank you for showing what it means to be Corning Blue. Thank you, Wendell.