Vishay Intertechnology, Inc.

Good day and thank you for standing by. Welcome to the Vishay Intertechnology fourth quarter 2025 earnings call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised, today's conference is being recorded. I would now like to turn the call over to your speaker today. Peter Henrici, please go ahead.

Thank you, Kevin. Good morning and welcome to Vishay Intertechnology's fourth quarter and year 2025 earnings call. I am joined today by Joel Smekal, our President and Chief Executive Officer, and by Dave McConnell, our Chief Financial Officer. This morning, we reported results for our fourth quarter and year 2025. A copy of our earnings release is available in the Investor Relations section of our website at ir.pichet.com. This call is being broadcast live over the web and can be accessed through our website. In addition, today's call is being recorded and will be available via replay on our website. During the call, we will be referring to a slide presentation, which we also posted at ir.pichet.com. You should be aware that in today's conference call, we will be making certain forward-looking statements that discuss future events and performance. These statements are subject to risks and uncertainties that could cause actual results to differ from the forward-looking statements. For a discussion of factors that could cause results to differ, please see today's press release and reshape Form 10-K and Form 10-Q filing with the Securities and Exchange Commission. We are including information in our press release and on this conference call on various gap and non-gap measures. We have included a full gap to non-gap reconciliation in our press release, as well as in the presentation posted on ir.fiche.com, which we believe you will find useful when comparing our gap and non-gap results. We use non-GAAP measures because we believe they provide useful information about the operating performance of our businesses and should be considered by investors in conjunction with GAAP measures. Now, I turn the call over to President and Chief Executive Officer, Joel Smetkov.

Thank you, Peter. Good morning, everyone. I'll start my remarks with a review of the fourth quarter revenue and business performance, and then turn the call over to Dave, who will take you through a review of the fourth quarter financial results and our guidance for the first quarter of 2026. Then I'll update you on the strategic levers we are pulling under our five-year strategic plan. After that, we'll be happy to answer any of your questions. For the fourth quarter, we generated revenue of $801 million, slightly above the midpoint of our guidance of $790 million and 1.3% higher than the third quarter. A growing broad-based business in industrial power and AI-related power applications drove this sequential increase. Revenue in all channels grew, led by distribution. Once again, Asia dominated the revenue growth. We executed well, still in an environment of shortages and escalations, by putting our expanded capacity to work to get backlog out the door, while generally maintaining competitive lead times. We met urgent supply needs of automotive OEMs and Tier 1s toward the end of last year, exercising our capacity readiness. Our work under Bechet 3.0 is becoming visible in our revenue generation. Orders for the fourth quarter are at a three-year high across all main product technologies, except capacitors, which reached their three-year high already in Q2 of 25. Orders from the channels of OEM, distribution, and EMS are also at three-year highs. Prior to Bechet 3.0, EMS customers ordered much less from Vishay because of our long lead times. Now we have an EMS business as a consistent and growing customer to support our accelerated growth. Overall, our order growth was broad-based in each region, each channel, each of our technologies, and each of our growth and markets, automotive, industrial power, aerospace defense, AI computing, and healthcare. These markets represent about 95% of our core business. After gradually building backlog each quarter over the first nine months of 2025, fourth quarter backlog grew nearly 14% with both semis and passives contributing to the increase. In the Americas, industrial and automotive customers drove semi-orders and aerospace defense customers drove passive orders. In Europe, we're seeing a broad recovery of industrial and market segments. In Asia, strong AI-related demand once again drove order growth. As a result, we ended the quarter with a book to bill of 1.2, up from the previously shared book to bill run rate at the end of October of 1.15. For semis, book to bill at quarter end was 1.27. And for passives, it was 1.13. Backlog at quarter end is $1.3 billion or 4.9 months. Improving market demand conditions, inventory replenishments, and our market share gains are putting us in a good position to grow. Positioning Bichet for greater growth and then achieving greater growth is our strategic plan, with many supporting initiatives from the beginning of Bichet 3.0. We are making it possible through our heavy investment over the past three years to expand capacity for our high-growth, high-profit products. Our initiatives to expand and more fully leverage the breadth of our portfolio of semiconductors and passives. And all of our work we put into strengthening customer engagement, re-engaging with previously underserved and inactive customers, and developing new customer relationships. Customers are responding to the positive impacts of Vishay 3.0 with deeper technical engagements, greater collaboration, and their willingness to scale long-term with us. Let's turn to a review of revenue for the quarter, starting with the revenue by end market on slide three. Automotive revenue decreased 3.4% versus the third quarter, mostly related to lower poll rates during the end of December holiday weeks in the Americas and Europe. Asia automotive revenue grew in a seasonably strong quarter. Orders for the quarter grew in each region. One of the key drivers of this increase is that we have the capacity to interest customers to use Bechet as a new supplier to mitigate the shutdown risk they were facing. It also opened the door to several new opportunities with OEMs and tier ones to supply more vehicle platforms and to become a more meaningful supplier mid to long term. New model year production ramp ups in customer forecast was another driver of strong bookings during the quarter. Design activity in automotive continues on projects related to electronic content increasing, including traction inverters, onboard chargers, ADAS, power steering and infotainment. Industrial power revenue increased 3.2% driven in part by increasing shipments of our high voltage DC power capacitors to many smart grid infrastructure projects, but also multi-product inventory replenishment in the channel and strengthening market demand for building security power requirements and new industrial programs ramping up. During the quarter, we won another smart grid infrastructure project in the Americas, which will go into production in the first half of 2026. We're continuing discussions with many customers about industrial smart grid projects that extend through the year 2032. in other industrial power segments bookings were strong in each region demand for industrial power management demand for industrial automation is beginning to recover also customers are beginning to place orders with longer visibility due to market stretching lead times with diodes and MOSFETs. Excuse me. In the Americas, Boucher 3.0 is gaining previously lost and underserved customers who designed us into the bill of materials years ago, and now we are gaining orders to drive their further volumes. Design supporting AI infrastructure are moving to mass production. These are all positive indications that for Bechet, industrial is back. Our design activity remains focused on power supplies for industrial servers, power monitoring and control systems, next generation AI power structures, smart meters, and humanoid robots. In addition, many customers are launching new versions of their core product lines. The aerospace defense and markets Revenue was slightly down, 1.2%, reflecting the impact of the U.S. government shutdown on billings and some projects with delayed timing in Europe. Orders increased with strong demand, particularly for capacitors, as funding is approved for military programs and in anticipation of production ramps forecasted in 2026. Design activity in the Americas and Europe remains focused on low Earth orbit satellites, drones, missile defense systems, as well as munitions. Revenue in healthcare was flat compared to the third quarter, with shipments tied to customer program milestones. Sales will fluctuate, and for this quarter, revenue declined in the Americas and Asia. Europe, on the other hand, had its strongest quarter in three years on demand for hearing aids, implantables, and diagnostic equipment. Bookings increased. In the Americas, we are supplying new programs, which are ramping up in Q1, and winning new business for capacitors to complement our custom magnetics business as we continue to fully leverage the breadth of Bechet's portfolios. In addition to continuing design activity on drug delivery systems, defibrillation, and advanced patient monitoring, we are now seeing opportunities emerge in the wearable space and are working with customers on heart rate and oxygen monitoring applications. Lastly, in the other category, revenue grew 10.6% versus the third quarter, primarily as customers ramp up production for new products to support AI power management applications. Order intake grew because of the increased production of AI servers and extended component lead times across the industry. A number of customers are actively adding Bechet to the bill of materials in AI related applications for both semiconductors and passives. In addition to the continued design activity and power conversion and power management, including multi-phase DC to DC converter modules, and chipset multi-phase power, AI optical modules. We are also working with customers on 800-volt power management applications. Let's turn to slide four for channel revenue. We'll review the channel revenue here. This quarter, each of our channels, OEM, EMS, and distribution grew quarter over quarter, led by distribution. OEM revenue increased 1.1% on a seasonally strong period for automotive customers in Asia and some volume gains in Europe from aerospace defense and industrial customers, which was partially offset by a year-end slowdown in billings. EMS revenue increased 1.4%, reflecting gains in Asia related to AI power and inventory replenishment, while in the Americas and Europe, Year-end holiday shutdowns closed receiving docks and reduced inventory at the end of December. Distribution revenue increased 1.4%, primarily in Asia, due to strong automotive and AI demand, in addition to some inventory replenishment. Order intake was strong in each region. In the Americas and Europe, industrial and aerospace defense customers continue to drive most of the ordering. as they prepare for new production starts in Q1. In Asia, bookings are accelerating as distributors replenish backlogs in anticipation of stronger AI demand forecast for 2026, ordering for pre-Lunar New Year in February, and in response to extended lead times for diodes and MOSFETs in both Asia and the Americas. Distribution inventory dropped to 22 weeks from 23 weeks last quarter. POS increased 3%, mainly to year-end demand in Asia. In the Americas, industrial and aerospace defense demand drove an increase in POS, following the strongest POS quarter in three years and continued booking records in January. POS in Europe is steady. Based on customer input, our strategy to cross-sell technologies throughout the channel is delivering results. Turning to our geographical mix on slide five, revenue growth for the quarter came entirely from Asia, which grew 3.6%, while the Americas and Europe was essentially flat compared to Q3 due to the year-end holiday slowdown, while somewhat offset by improved industrial demand. Before turning the call over to Dave, I would like to take a moment to thank the Bechet employees and our reps for their contributions to Bechet's success and accomplishments in 2025. Their commitment to putting the customer first, re-engaging customers, embracing a business-minded approach, and increasing our production output and expanding our operations is helping to raise Bechet's level of performance and making Bichet 3.0 a reality. Now I'll turn the call over to Dave for a review of our fourth quarter financial results.