Ladies and gentlemen, thank you for standing by. Welcome to the Silicom Third Quarter 2025 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. You should have all received by now the company's press release. If you have not received it, please contact Silicom's Investor Relations team at EK Global Investor Relations at 1 (212) 378-8040 or view it in the News section of the company's website, www.silicom-usa.com. I would like to hand over the call to Mr. Kenny Green of EK Global Investor Relations. Mr. Green, would you like to begin, please?

Thank you, operator. I would like to welcome all of you to Silicom's quarterly results conference call. Before we start, I would like to draw your attention to the following safe harbor statement. This conference call contains forward-looking statements. Such statements may include, but are not limited to, anticipated future financial operating results and Silicom's outlook and prospects. Those statements are based on management's current beliefs, expectations and assumptions, which may be affected by subsequent business, political, environmental, regulatory, economic and other conditions and are subject to known and unknown risks and uncertainties and other factors, many of which are outside of Silicom's control, which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements. These include, but are not limited to, Silicom's increasing dependence for substantial revenue growth on a limited number of customers, the speed and extent to which Silicom solutions are adopted by the relevant markets, difficulties in the commercializing and marketing of Silicom's products and services, maintaining and protecting brand recognition, protection of intellectual property, competition, disruptions to manufacturing and sales and marketing; development and customer support activities, the impact of war, rising inflation, changing interest rates, volatile exchange rates as well as any continuing or new effects resulting from pandemic and global economic uncertainty, which may impact customer demand through customers exercising greater caution and selectivity with their short-term IT investment plans. The factors noted are not exhaustive. Further information about the company's business, including information about factors that could materially affect Silicom's results of operations and financial conditions are discussed in Silicom's annual report on Form 20-F and other documents filed by the company that may be subsequently filed by the company from time to time with the Securities and Exchange Commission, the SEC. Therefore, there can be…

Thank you, Kenny. I would like to welcome everyone to our conference call to discuss the results of the third quarter of 2025. We are pleased with the ongoing progress that we have made in the third quarter, marked by another period of strong execution in line with our strategic plan and demonstrating solid design win momentum and success across various product lines. The design win momentum is tracking ahead of expectations. Since the beginning of the year, we have achieved 8 major new design wins with important new customers as well as existing ones, which builds out for us an impressive roster of design wins, the key for our expected growth from 2026 and beyond. I remind you that our goal was to reach between 7 and 9 design wins for the full year of 2025. As of October end, we have suppressed the lower end of our 2025 target range and with 2 months left to the end of the year, we are just 1 design-win short of the upper end of this ambitious target range. We see new design wins as the most tangible indicator of our progress in addition to the breadth and depth of our opportunities funnel. The focus on our core product lines, coupled with deep relationship with customers and potential new customers has created this solid funnel. We expect to continue to convert this funnel to further design wins in 2026 and have set for ourselves a new aggressive target of between 7 to 9 additional design wins in the coming year, spanning all product lines, including FPGAs, Edge solutions and SmartNICs. Our third quarter performance demonstrates that we are successfully advancing and meeting our milestones and our solid momentum underlies our optimism for returning to double-digit revenue growth in 2026 and beyond.…

Thank you, Liron, and good day to everyone. Revenues for the third quarter of 2025 were $15.6 million, 6% ahead of the $14.8 million reported in the third quarter of last year. The geographical revenue breakdown over the last 12 months was as follows: North America, 75%; Europe and Israel, 17%; Far East and rest of the world, 8%. During the last 12 months, we had one 10%-plus customer, which accounted for about 14% of our revenues. I will be presenting the rest of the financial results on a non-GAAP basis, which excludes the noncash compensation expenses in respect of options and RSUs granted to directors, officers and employees, taxes on amortization of acquired intangible assets as well as lease liabilities, financial expenses. For the full reconciliation from GAAP to non-GAAP numbers, please refer to the press release we issued earlier today. Gross profit for the third quarter of 2025 was $5 million, representing a gross margin of 31.8% compared to a gross profit of $4.2 million or gross margin of 28.8% in the third quarter of 2024. While I note that our short to midterm expected gross margin range remains between 27% to 32%, we are very pleased with achieving a gross margin at the higher end of this range ahead of our strategic plan model. Operating expenses in the third quarter of 2025 were $7.4 million compared with $6.5 million reported in the third quarter of 2024. Our operating expenses in the quarter were higher than expected due to the relative weakness of the U.S. dollar, the currency in which we report versus the Israeli shekel and the Danish krone, the main currencies in which a large portion of our expenses are generated. Operating loss for the third quarter of 2025 was $2.4 million compared to an operating loss of $2.3 million as reported in the third quarter of 2024. Net loss for the quarter was $2.1 million compared to a net loss of $1.7 million in the third quarter of 2024. Loss per share in the quarter was $0.36. This is compared with loss per share of $0.28 as reported in the third quarter of last year. Now turning to the balance sheet. As of September 30, 2025, our working capital and marketable securities amounted to $114 million, including $46 million in high-quality inventory and $76 million in cash, cash equivalents, bank deposits and highly rated marketable securities with no debt. That ends my summary. I would like to hand back to the operator for the questions-and-answer session. Operator?

[Operator Instructions] The first question is from Ryan Koontz from Needham.

Hi, this is Jeff Hopson on for Ryan Koontz from Needham. Just wanted to understand maybe more where Silicom could fit in with the ongoing AI narrative. Obviously, ASICs have a place in AI, but I would think there are also specialized situations where your guys' NICs could be utilized. So just maybe some more info on that.

Absolutely. So when we look at AI, we see opportunities in a few different product lines, maybe even all product lines to be more accurate. So on the one side, we see opportunities for our NICs, our high-speed NICs, 400-gig NICs. Those are just the right equipment you need for the inference systems as well as the training systems. So this is one area that we think this could be very good potential. Another area is with the FPGA because a lot of things are not really well defined still, I would say, in AI systems and there's a lot of proprietary communication and protocols that FPGA can bridge the gap there where ASICs are not available right now and probably will not be in the foreseeable future. And the third one is also on the edge systems where we are able to see opportunities for edge inference. We actually just had a webinar together with Intel about it yesterday, showing some use cases of AI at the edge, and we feel there's opportunities with all of them. Some of those are more advanced right now. Some of them are more early exploratory, but I think we definitely have opportunities in all of them.

And then looking at the presentation, you also have some large opportunities with service providers and some telco equipment. Just curious of the spending environment in those 2 in the telecom industry, if that's getting better or if there's certain things that are pushing spending or new types of hardware there?

Yes. I mean we have discussions with both service providers as well as OEMs and enterprises. Service providers, we have like Tier 1, also Tier 2, Tier 3 service providers. Some of them are the really big telcos and some of them are smaller. We definitely see for our products, for our type of products, we see the need. Customers see the need, they actually need our products for the next generation and to support their customers. So this is something that we feel will have good opportunities. We probably will also have design wins with service providers. So we feel good about it.

[Operator Instructions] There are no further questions at this time. Before I ask Mr. Eizenman to go ahead with his closing statement, I would like to remind participants that a replay of this call will be available by tomorrow on Silicom's website, www.silicom-usa.com. Mr. Eizenman, would you like to make your concluding statement?

Thank you, operator. Thank you, everybody, for joining the call and for your interest in Silicom. We look forward to hosting you on our next call in 3 months. Good day.

Thank you. This concludes Silicom's Third Quarter 2025 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.