X-Fab Silicon Foundris Se

Hello, and welcome to the XFAB third quarter 2025 results conference call. My name is George. I'll be a coordinator for today's event. Please note, this conference is being recorded, and for the duration of the call, your lines will be in a listen-only mode. However, you will have the opportunity to ask questions towards the end of the presentation, and this can be done by pressing star 1 on your cell phone keypad to register your question. If you require assistance at any point, please press star 0, and you'll be connected to an operator. I'd like to call over to your host, Mr. Rudy de Winter, CEO, to begin today's conference. Please go ahead, sir.

Thank you. Welcome, everyone. In the conference call today, we also have Alba Morganti, CFO. In the third quarter of 2025, we recorded revenues of $229 million, up 11% year-on-year, and 6% quarter on quarter, which is well above the guidance of 215 to 225 million. We also progressed well in our core markets, automotive, industrial, medical, with a revenue of 216 million, up 14% year on year, and 5% quarter on quarter. Our core business now represents a share of 94% of the total revenue. Now breaking it down by end markets, in the third quarter the automotive revenue was 147, up 1% year-on-year and 2% quarter-on-quarter. The third quarter industrial revenue was 48 million, up 51% year-on-year and 1% sequential, reflecting the overall recovery of our industrial end market. The gradual recovery of the silicon carbide business contributed to this positive evolution. Now for the medical business, the revenue in the third quarter hit a record high of $21 million, up 74% year-on-year and 40% quarter-on-quarter. The growth was mainly driven by contactless temperature sensors, DNA sequencing, and echography applications that altogether did very well in the past quarter. Now looking at it by technology, in the third quarter, the CMOS revenue recorded a growth of 10% year-on-year and 4% quarter-on-quarter, mainly due to the extra capacity that came online for the 180 nanometer BCD on SOI. and the 350 nanometer CMOS node demand was weaker. Microsystems revenue was up 27% year on year and 9% sequentially. This is based on a broad set of customer specific microsystem technologies that we co-created with our customers. Also, the amount for new developments in the microsystems remains strong, and this is an area where we will continue to see above average growth. Our silicon carbide business continued to recover, and revenue grew strongly by 30% year on year and 21% quarter on quarter. The number of sick wafers produced in the third quarter more than doubled compared to a year ago. The revenue did not follow the same way due to the product mix and also the ratio of consigned substrates that was much, much higher past quarter than a year ago. The positive trend in the evolution of our silicon carbide business is underpinned by increasing bookings attributed to sustained demand from data center, electric vehicles, and renewable energy applications. We also see good traction on our new technology platforms that we released at the end of 2024. Many customers are developing their new generation products based on this platform that will give improved performance and lower system costs. The fact that we offer full supply chain for silicon carbide in the US is well perceived by our US customers that are designing in products for high value assets such as data centers, industrial equipment and electric energy systems. Quarterly prototyping for the past quarter was 20 million, down 16% year-on-year and 6% down quarter-on-quarter. The order intake for the third quarter amounted 163 million, down 25% year-on-year and down 21% compared to the previous quarter. The booking in the industrial segment was good. The weakness is primarily due to inventory corrections by automotive customers as well as broader macroeconomic uncertainties resulting from geopolitical tensions and trade disputes. These factors have led to more cautious ordering patterns while customers also take advantage of shorter cycle times placing orders later than usual and with reduced lead time. As a result, feasibility is still restricted. The backlog for the third quarter came in at 347 million compared to 413 million at the end of the previous quarter. Let's now move to the operations update. In September, we had the inauguration of the new cleanroom in Malaysia, which will increase the site's manufacturing capacity from 30,000 to 40,000 wafer starts per month. Production at the new facility is being scaled up progressively, with the full increase in capacity anticipated by the fourth quarter of 2026. The expansion will effectively double our capacity for the popular 180 nm BCD on SOI technology, which is particularly suited for applications such as smart motor drivers, various drivers such as piezo actuators, LED drivers, and battery management systems. The recovery of the silicon carbide business is supported by the existing capacity at our Texas facility. The current installed capacity will enable us to do more than double the wafer starts. The capital expenditure for the third quarter was $23 million, bringing total year-to-date CapEx to $179 million, and the full-year capital expenditure is projected to be less than $250 million. Let me now pass the word to Alba for the financials.

Thank you, Rudy. Good evening, ladies and gentlemen. We will now go through the financial update. I would like to start this section by highlighting that the third quarter, we succeeded in increasing our sales by 6% quarter-on-quarter, which were the highest since almost two years, totalizing $228.6 million, and which is well above the guided $215 to $225 million. Our EBITDA grew by 4% quarter-on-quarter, and 7% year-on-year, being the highest this year. Our EBIT was almost $24 million, down 5% year-on-year, but increasing by 10% if we compare it to Q3 last year. Third quarter EBITDA was almost $54 million, with an EBITDA margin of 23.6%. If we exclude the impact from revenues recognized over time, the ABDA margin would have been 24.2% within the guided range of 22.5% to 25.5%. Our profitability remains unaffected by exchange rate fluctuations as we continue to be naturally hedged. At a constant US dollar-euro exchange rate of 1.10, as experienced in the previous year's quarter, the BDA margin would have been unchanged at 23.6%. In the third quarter, we reported a financial result of minus 5.6 million, mainly due to interest results of US dollar 4.3 million dollar. And realized foreign exchange losses arising from the re-evaluation of the Euro denominated debts amounted to $800,000, but of course it's a non-cash item. Cash and cash equivalents at the end of the third quarter amounted to $174.2 million, which means an increase of $16.5 million compared to the previous quarter, while net debt decreased by $21.1 million dollar quarter on quarter. Despite the peak of capex expenditures payments in the first half of 25, our financial situation remains solid. As anticipated and now visible, our capex are now significantly decreasing, which translates into an improvement of our net debt position, which trend is inversely for the first time since a while. Especially in the current context of uncertainties and geopolitical tensions, it's important to keep our financials strong. And to conclude this financial section, I would like to share our next quarter's guidance. Our revenue is expected to come in within the range of $215 to $225 million with an ABDA margin in the range of 22.5% and 25.5%. This corresponds to a full year revenue in the range of $863 to $873 million for the full year 2025. This guidance is based on an average exchange rate of $1.17 US dollar to euro and does not take into account the impact of the IFRS 15. And now I would like to give the word back to Rudy.