Good morning, ladies and gentlemen, and welcome to the Celestica Fourth Quarter 2024 Earnings Call. At this time all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded. I would now like to turn the conference over to Mr. Craig Oberg, Vice President of Corporate Development and Investor Relations. Please go ahead.

Good morning, and thank you for joining us on Celestica’s Q4 2024 earnings conference call. On the call today are Rob Mionis, President and Chief Executive Officer; Mandeep Chawla, Chief Financial Officer. Listeners should note that as previously communicated, all of our financial results, including historical comparisons, will now be reported on a U.S. GAAP basis, having transitioned from reporting under IFRS previously. Please note that our guidance for Q4 2024 was issued on an IFRS basis and has not been restated due to our assessment that the impact of the transition to U.S. GAAP standards did not have a material impact on these figures. Please note that during the course of this call, we will make forward-looking statements relating to the future performance of Celestica, which are based on management's current expectations, forecasts, and assumptions. While these forward-looking statements represent our current judgment, actual results could differ materially from a conclusion, forecast, or projection in the forward-looking statements made today. Certain material factors and assumptions are applied in drawing any such statement. For identification and discussion of such factors and assumptions, as well as risk factors that may impact future performance and results of Celestica, please refer to our public filings available at sec.gov and sedarplus.ca, as well as our investor relations website. We undertake no obligation to update these forward-looking statements unless expressly required to do so by law. In addition, during this call, we will refer to various non-GAAP financial measures, including adjusted operating margin, adjusted gross margin, adjusted return on invested capital or adjusted ROIC, free cash flow, gross debt to trailing 12-month adjusted EBIDTA leverage ratio, adjusted earnings per share or adjusted EPS, adjusted SG&A expense, and adjusted effective tax rate. We have included in our earnings release, found on our Investor Relations website, a reconciliation of non-GAAP financial measures to the most comparable GAAP measures. With respect to our Q1 2025 and 2025 annual outlook, our earnings release does not include a reconciliation of forward-looking non-GAAP measures to the most directly comparable GAAP measures on a forward-looking basis, as items that we exclude from GAAP to calculate the comparable non-GAAP measure are dependent on future events that are not able to be reliably predicted by management and are not part of our routine operating activities. We are unable to provide such a reconciliation without unreasonable effort due to the uncertainty and inherent difficulty in predicting the occurrence, the financial impact, and the periods in which the adjustments may be recognized. The occurrence, timing, and amount of any of the items excluded from GAAP to calculate non-GAAP could significantly impact our Q1 2025 and 2025 GAAP results. Unless otherwise specified, all references to dollars on this call are to U.S. dollars. All per-share information is based on diluted shares outstanding, and all references to comparative figures are a year-over-year comparison. Let me now turn the call over to Rob.

Thank you, Craig, and good morning, everyone, and thank you for joining us on today's call. We delivered strong performance in the fourth quarter with revenues of $2.55 billion at the high-end of our guidance range and adjusted EPS of $1.11, exceeding the high-end of our guidance range. Our adjusted operating margin of 6.8% exceeded the midpoint of the revenue and adjusted EPS guidance ranges. This result was driven by robust demand in our CCS segment, which delivered solid growth of 30% year-over-year as we continue to see strong demand from our Hyperscaler customers. ATS segment revenues met expectations in the fourth quarter, reflecting anticipated market dynamics. While we continue to see a moderation of demand in our industrial markets, we are encouraged by the strength in our capital equipment business, which achieved nearly 30% year-over-year growth. Overall, 2024 was an outstanding year for Celestica, in which we continue to build on a positive momentum. For the full-year, we achieved $9.65 billion in revenues and adjusted EPS of $3.88, representing growth of 21% and 58% respectively, along with 100 basis point improvement in our adjusted operating margin. We are pleased with the company's performance and the significant progress we have achieved over the past several years. The growth of our AI platforms, along with the exceptional execution by our entire team, continue to be the engines of our strong performance. And we are optimistic about continuing this momentum in the years to come. Before I provide you with some additional color on the outlook of each of our businesses, I would like to hand the call over to Mandeep, who will provide you further details on our financial performance during the fourth quarter and our guidance for the first quarter of 2025. Mandeep, over to you.

Thank you, Rob. And good morning, everyone. Fourth quarter revenue of $2.55 billion was up 19% and at the high-end of our guidance range. This strong performance was fueled by significant demand from Hyperscaler customers in our CCS segment, primarily for networking products within our HPS business. Adjusted gross margin for the quarter was 11.0%, up 50 basis points, driven by higher volumes and favorable mix. Fourth quarter non-GAAP operating margin was 6.8%, an increase of 80 basis points driven by higher volumes in our CCS segment and better mix due to higher HPS revenues. Our fourth quarter adjusted earnings per share was $1.11, exceeding the high-end of our guidance range and an increase of $0.34. Our adjusted effective tax rate for the quarter was 19%. And finally, our fourth quarter adjusted ROIC was at 29.1%, a significant improvement of 550 basis points, attributed to higher operating profitability and effective working capital management. Moving on to our segment performance for the quarter. ATS segment revenue totaled $806 million, approximately flat and in line with our guidance. The performance this quarter was a result of lower revenues in our industrial business offset by continuing strengthening capital equipment and aerospace and defense. Our ATS segment accounted for 32% of total revenue. Our CCS segment in revenue reached $1.74 billion, up 30%, due to very strong growth in our communications end market. The CCS segment accounted for 68% of total company revenue in the quarter. Revenue in our enterprise end market was lower by 10% in line with our guidance due to the anticipated technology transition in an AI/ML compute program with one of our Hyperscaler customers. This was partially offset by favorable demand dynamics in certain storage programs. Revenue in our communications end market saw an increase of 64%, exceeding our guidance…

Thank you, Mandeep. We are pleased to raise our full-year outlook reflecting strengthening demand in our CCS segment. This increased confidence is supported by strengthening forecasts from our customers through the first three quarters and growing visibility into the fourth quarter. These targets represent our current high confidence view of 2025 and we will continue to assess market dynamics and provide updates accordingly as the year progresses. We now anticipate revenues of $10.7 billion, an increase from our previous outlook of $10.4 billion, reflecting growth of 11%. This translates to a non-GAAP adjusted EPS of $4.75, representing 22% growth based on a non-GAAP operating margin outlook of 6.9%. Finally, we are raising our outlook for free cash flow to $350 million, demonstrating strong earnings conversion, while continuing to invest in growth to meet robust customer demand. Next, I would like to provide you some additional color on our businesses for the year. In our CCS segment, we are now anticipating mid-double-digit revenue growth in 2025, compared to our outlook of low-double-digit growth communicated in October. In our communications end market, we anticipate strength throughout the year as new 800G programs with Hyperscalers continue to ramp. In our enterprise end market, we continue to expect a softer first-half of the year resulting from the technology transition in an AI/ML compute program with a large Hyperscaler of customer. However, we anticipate revenues to accelerate in the second-half of the year, driven by the ramp up of a previously communicated, sole-sourced, next-generation AI/ML compute program, further supported by the ramping of AI/ML compute and Rack programs with [Indiscernible]. Moving on to our ATS segment, our 2025 outlook for our ATS segment revenues is approximately flat as growth is being primarily offset by the decision not to renew a dilutive margin program in our…

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] And your first question is from George Lyon from Barclays. Your line is now open.

Okay, thank you guys. Thanks for taking my question and congrats on the call and the guide. Just two quick ones. Firstly, as we kind of look at the energy of [Technical Difficulty] recycle, just can you talk about any thoughts on continuously pull through on the 400G for this year? And similarly, into 2026, you have one to three programs on the 1.6T. And any thoughts on whether that's going to cannibalize lower speeds or should have continue to have strong growth across 800G coexist with the lower speeds as well? Just kind of how to think about those relationships.

Hi, George. Yes, this is Rob. So, you know, we see 400G and 800G coexisting for quite some time. You know, as we go into 2025, we're obviously ramping up 800G quite a bit. It'll be up, you know, 300% to 400%. But 400G is also growing as we get into 2025 as well. And in the out years, again, we see a long tail for 400G. As the price points come down on 400G, there will be different use cases for that type of technology. So again, we see these technologies coexisting for a long period of time.

Okay, great. Just a second one if can squeeze in quickly, Rob and Mandy. But just, it's remarkable you guys diversified the customer base kind of versus kind of Tier 1 hyperscalers in the past. And you guys talked about Brock during last quarter, but also another larger scale digital native company can be potentially as large as your largest customer at the peak of run rate of revenue down the road? I'm just curious, maybe you can talk about your differentiation. Everybody know you guys have a crown jewel asset in terms of the HPS networking. But in terms of the server with the liquid cooling and the power management, maybe you guys are taking a share versus some of the incumbents, i.e. the [HODMs] (ph). Can you kind of maybe unpack going forward, maybe potentially the tariff concern kind of onshoring you guys are kind of well positioned, whether from a design, sorry, perspective, but kind of a more sort of modular HPS, so every design, but also kind of a more a power cooling needs can continue to sustain this differentiation versus some of the Taiwanese and Chinese ODMs?

Yes, thanks, George. I'll provide you a little bit of a background on the digital native win that we alluded to in the script. So this is a major design win, and it includes the design, the manufacturing, and services for a fully [Indiscernible] rack. Now, this rack is optimized for artificial intelligence. And this particular customer, they were looking for a strategic partner with extensive expertise and capability in liquid-cooled system design and also able to manufacture at scale and that had our name written all over it. They conducted a rigorous award process and ultimately they decided to select us, because we had strong technical knowledge, we had cycles of learning, we had intellectual property, we had significant design and manufacturing capabilities, and we also had a resilient supply chain capabilities across multiple countries, you know, beginning in the USA. This solution that we're providing them includes a 1.6T networking stretch and also proprietary compute. It also includes significant services component, which means installation and maintenance. And again, we'll be supporting this across multiple geographies. So, I think the fact that we have decades, a decade plus experience in this space has led us to win against the OEMs.

Okay, great. I go back to the queue. Congrats again.

Thank you.

Thank you. And your next question is from Robert Young from Canaccord Genuity. Your line is now open.

Hi, good morning. On the new win for the integrated rack with a custom ASIC, I was curious to just talk about the relationship with Broadcom, who's been very bullish on the market around custom ASIC. Is this a relationship with Broadcom? Is that influenced by Broadcom? And how is that relationship developing?

Yes, hi Rob, this is Rob. Are you talking about the hyperscale win, the digital native win?

Digital native. The digital native.

Yes, on the networking side, this is using our longstanding relationship with our custom silicon providers. Can't go into too many specifics there, but it's the silicon providers that we have been using before the majority of our high bandwidth switches. And on the compute side, custom compute side, this will be the customer's custom compute silicon, which will be, you know, liquid cooling and encapsulating and designing into a fully integrated rack.

Okay and then you already talked a little bit about the HPS content in this rack solution to just go in more detail on how deep the Celestica ODM and IP contribution to this win is. Is it in just the switch? Is it in servers and storage? You've highlighted cooling. Maybe you just go through the contribution that Celestica is expecting to make from its own IP.

Yes, thanks, Rob. This is a very significant design project for us. It is actually an entire rack. So it includes, as you mentioned before, the switching, the compute module, and includes the cable backplanes, includes the rack itself, the rack and footprint cooling. And it's not just rack integration we're doing, racks we're actually doing full rack orchestration. So this is leveraging a significant amount of our IP that we've developed over the past 10-plus years.

And I presume you'd be able to develop that IP further around this?

Yes. And we think to that point, Rob, that when we successfully execute this full rack system, this is just going to be yet another proof point that will lead to further growth for us with this customer and with other similar customers across the industry.

Okay, and last one for me is just on the guidance for the year. If you just look at cadence through the year, it looks as though the growth is a little bit weaker in the back half despite all of the ramps in second-half. And so I'm curious, I know you don't give guidance on Q2 at this point, but if you give us a sense of maybe the cadence of revenue through the year to better model that and then I'll pass the line.

Yes, hi Rob, good morning. You know, I want to reiterate what we said on the call, which is this is our high confidence view. We're pleased to be able to rate the revenue outlook to $10.7 billion from $10.4 billion, that's 11% growth. And then the EPS had 22% growth to $4.75. But what you'll notice is in the first quarter, those numbers are higher. So we've guided up to midpoint 15% revenue growth, and EPS is growing above 30%. And so we're taking a view right now on what we know is solid in front of us Q2 to Q4. We have very good visibility and now through the third quarter with our largest customers, but frankly the fourth quarter the visibility is not yet fully locked down. It's improving. We're confident in it and we're having very positive discussions, but these things will continue to solidify as we go through the coming months. So this is our high confidence view. We would of course be looking to do better than that as we go through the year.

Thank you.

Suer.

Thank you. Your next question is from Thanos Moschopoulos from BMO Capital Markets. Your line is open.

Hi, good morning and congrats on the new customer wins. With respect to enterprise is the program transition with the large customer proceeding as expected. And just to clarify, would you expect Q1 to be at the bottom in terms of that transition from a sequential perspective or will be your outlook on that?

Yes. Hi, Thanos. Yes, things are going as we expected them to be. Enterprise is down year-over-year as the sole source program is moving toward end of life. We will see a little bit of a reduction as we go through the first-half of the year. The new program that we have won a while ago is on track for ramping in the third quarter, and we would expect a return to year-over-year growth as we get to the end of 2025. So those things, talk with our largest customers, completely on track. And then as a reminder with the win that we announced before with Brock, that program ramp is already working out well and we're seeing sequential improvement in that program as we go from Q4 to Q1 and that will strengthen as we go through the year. And then with this new customer win that Rob has just been speaking about, it's really nice to see yet another custom server win that will be ramping in 2026. So we are continuing to make some good progress on the server side.

And on that note, is there an incremental clarity you can provide in terms of just the strength of the pipeline you're seeing for additional server and custom racked opportunities?

Sure, Thanos. There is a very strong pipeline of additional server opportunities. Again, we tend to play on the proprietary compute side, and that's where our focus is. And we also tend to play on the HBS side of things, so where there's high design content. And I would say the pipeline is quite healthy.

All right, I'll leave it there, thanks.

Thank you.

Thank you. Your next question is from David Vogt from UBS. Your line's not open.

Great. Good morning, guys. Thanks for taking my questions. I've got a couple, if you will, as well. So Rob or Mandeep, on the second 1.6 terabyte program that you won with a large hyperscale customer. Can we clarify, is that an existing customer as they just migrate to faster speeds? Is that a new customer? And along those lines, is there an opportunity to expand the relationship from an optimized networking rack to other parts of the network and/or add compute? And I'll give you my second question on the digital native customer. I think I heard Rob say it's across multiple geographies. Is it fair to say that this customer historically has been sort of an [Infini Band] (ph) based customer and this is sort of an initial opportunity to deploy Ethernet technology from Celestica across, obviously, a more complete solution, but just trying to get a better understanding of kind of how to think about the technological roadmap? Thanks.

Hi David. Yes, so on the hyperscaler customer, yes, they are an existing customer. We currently support this customer with both 400G and 800G switches. So this is really a natural extension of our relationship and it's for their next generation family of 1.6T liquid-cooled networking rack. So again, this is not just a switch, but the entire rack. And we will be the final integrator for the system. Again, this will be a multi-node solution for them in terms of both the U.S. and Southeast Asia. And on, oh, and you also asked, do we see the opportunity to expand our solutions for this customer? You know, absolutely. You know, based on what we're doing with the digital native customer and also what we're doing with this hyperscaler, we see opportunities to, you know, grow our share of wallet with this hyperscaler as well.

And with respect to the digital native customer, they have very specific and unique needs for the data center that they're building. I wouldn't say they're an incentive-banned customer going to Ethernet. I would say this is their own custom design for the data center, and we're supporting them with a fully customized rack.

Great. Thanks guys. Congrats.

Thank you.

Thank you. Your next question is from Steven Fox from Fox Advisors. Your line is now open.

Hi, I was wondering if I could follow-up on some of these questions from maybe a 1,000 foot level, which is you've had a couple of landmark wins now the last couple quarters that are diversifying you guys away from you know you're you know the large cloud guys you've been selling to and you're doing it with more complex rack integration and orchestration, so like from those two aspects customer diversity and more complexity on the rack? How should we think about the business changing over, say, the next 12 to 18 months or 24 months towards those trends? Thanks. And then I have a follow-up.

Thanks, Steven. Yes, if you step back in time, keeping it at a high level, back in the day as they say, contract manufacturers turn to EMS. I think we're clearly in our CCS business and the ODM category with these new wins were actually well under our way to be a product company in the OEM section. So I think these are just further proof points to distance ourselves from ODM into OEM land. And I think that's where our CCS business is going.

That's helpful. And then just on the liquid cooling front, I'm a little, I just want to make sure I understand. On these wins, are we talking about leveraging your own technology at the board level with cold plates, as well as at the rack level? And how much of that would you be manufacturing yourself, as opposed to just design and integration? Thanks.

Yes, we're talking about focus at rack level and also at the chip level and orchestrating it. And we have ecosystem partners that do the manufacturing and we're integrating it and applying our process, our processes at scale to make sure that we're able to deliver fully integrated systems.

One of the things that we have been hearing from our customers is that the challenge really gets to being able to produce liquid-cooling solutions at scale and we have demonstrated strong capabilities in this area and strong and we have a lot of experience in that area and that's a lot of the know-how that we're able to bring to the table as well.

Great. Thank you very much.

Thank you. Your next question is from Ruben Roy from Stifel. Your line is open.

Thank you very much for letting me ask a question. Mandeep, I was wondering, just kind of following up on some of the questions around the extensive development cycle, I guess, with the new customer, are you thinking about CapEx? Would you have to make any changes to your capacity to support either of these new programs or both? What does it mean for capex levels of sales going forward, please?

Yes, so first of all, welcome Ruben. Really nice to have you take over from Matt at Stifel. Yes, to answer your question, we're very comfortable with the capacity that we have. We've been growing at strong double-digits now three years in a row, and we've been able to maintain our CapEx spend at less than 10%. Just as a reminder, the majority of the CapEx that we spend is on growth CapEx. We only have about 40 basis points of maintenance. And that gives us a lot of discretion on where we want to point those dollars. We have the capacity we need right now to execute all of the demand that's in front of us. We will be targeting some of the growth CapEx that we have in 2025 to areas like continue to expand in Thailand. We have shown that in Southeast Asia we can bring on capacity in our existing campuses in under a year when needed to support our customer demand strength. And so the way to think about CapEx in 2025 is similar to what we've been saying in the previous year, is 1.5% to 2% of revenue. And I don't really see at this point a need for that to be very different in the outer years either.

Got it. Thank you, Mandy. And then, Rob, thanks for the comments on your early assessment of how to think about DeepSeek. But I guess, given that you've given us some thought, the comment around networking, the networking opportunity longer term, maybe if you could just give us a little more detail about how you're thinking about that. It sounds like if we do get to a point where we can get cheaper AI to the edge, that could be a good thing. Is that what you're thinking about? But what does that mean for sort of scale up and scale out of the big clusters that we're getting used to? I guess just any more detail about how you're thinking about the networking opportunity, if you have any, would be great. Thank you.

Thanks, Ruben, and again, welcome. Yes, as some of the industry pundits are saying, increased AI accessibility will drive demand. That's our views as well. In the middle of all this, networking really remains crucial. It's crucial for scaling all the AI systems, for transporting data, for training, for inferencing. And networking really is agnostic to the type of large language models that are being used today. If you think about networking, it might require real-time analytics. So as DeepSeek is used for real-time applications, like high-frequency trading or fraud detection or autonomous vehicle control, the need for minimal latency becomes critical. And high bandwidth switching offers a solution to that. Even if you think DeepSeek will drive distributed computing. Again, if it's distributed across the cluster of servers, again, you'll still need high bandwidth switching. So, you know, we actually view, in terms of our networking business, this is a very positive development to actually drive growth in our portfolio.

That's very detailed. Thanks.

Thank you. [Operator Instructions] And your next question is from Paul Treiber from RBC. Your line is now open.

Thanks very much and good morning. Just a comment or a question on the win with the digital native customer. And just more broadly speaking in terms of your pipeline, are you seeing a trend towards customers shifting to procuring end-to-end full rack solutions versus maybe in the past procuring individual components?

But certainly the case Paul with digital native customers. I mean, this class of customers really want a full solution. As I mentioned with this particular customer, not only is it the full rack solution, we're actually doing services, a fairly sizable service solution. So we think that this win will give us a further proof point to expand our market share with this new class of customers. With respect to hyperscalers, it does depend on the hyperscalers we mentioned, you know, in the script that the hyperscaler win that we had on the 1.6T switching was at inflection point. And what we're providing with this customer was a dedicated AI networking rack. And this is, again, designed specifically for AI/ML workloads. And it's optimized -- has optimized fabric. It improves efficiency. It incorporates liquid-cooling directly within the rack and the switch itself. And this will most likely be required for all the latest 1.6T designs. So again, in terms of full rack solutions, this is where we think the market is going and we think we're very well positioned.

And along with that, you made an interesting comment about the shift from contract manufacturing EMS to ODM and then product and the importance of your HPS business to contract wins? When you look at your pipeline and you look at the mix or differentiation from HPS, how do you compare that? Like how much of a factor is that having to your ability to win these contracts as you look out in the next couple years?

You know, we've been increasingly investing in R&D and design capability and expanding our design network for the past 10-plus years. I think many people chime in we're over…

Like $75 million we're going to be spending this year and we are comfortable spending up to $100 million in 2025 as well.

And based on our growth, we anticipate to continue to invest in design capabilities and migrate towards that journey that I mentioned.

I know you know this, Paul. We have over 900 design engineers. They are engaging with customers in multiple ways. So as Rob talked about, our OEM type of offerings are, we have Celestica products that have a Celestica logo on it that our customers that have been tested and meet our customers' needs directly. But then in addition to that, we have the same engineers, who can work with customers on customizing a solution to what they're looking for. And we work in collaboration along the way. And so while some of our wins do fall under the HPS umbrella, because they have a heavy level of our design content, we also use our engineers to help us win on the EMS side. And so we find that our engineering expertise is a key differentiator, which is why, again, if you think back like five years ago, we were spending about $25 million in R&D. We're now spending 3 times that and going again into $25 million, it's going to be 4 times that. And the return on that investment is very high.

And lastly, if I can squeeze in 1 more, just with the change in the U.S. administration, talk about tariffs and also enthusiasm for on-shoring. Are your customers, you mentioned Thailand and expanding in Thailand, but are you getting more requests for production in the U.S. and how are you thinking about U.S. facility expansion going forward?

Yes, right now, our customers are in a wait-and-see mode, but as we've done in the past, we have resilience inside our network. So if tariffs in one area end up causing a customer to want to shift, we feel we can serve them in another area. You know, right now we have ample capacity in the U.S. and ample capacity not just means physical capacity, but also means power. We've actually secured power for our CCS business for years to come in anticipation of our growing businesses. So we're keeping our eyes open and we're keeping them open. Right now customers are in a wait-and-see mood because, you know, every day is a kind of a new direction, if you know what I mean.

And specifically to the U.S., just as a reminder, we do a lot of semiconductor manufacturing on the West Coast of the United States. We do very complex aerospace and defense work in the Midwest. And then we do have in Richardson, Texas, a very large facility, which is supporting our hyperscaler customers. And we've been doubling revenue for a couple of years now in the Texas facility. We will be more than doubling the revenue again in 2025. And again, as I mentioned earlier, all within the CapEx envelope that we would expect.

Thanks for taking the questions.

Thank you. Your next question is from Todd Coupland from CIBC. Your line is open.

Yes, good morning, everyone. I wanted to ask about the communications business, specifically on the margin side. So if you could help us bridge your networking margins relative to peers in the market that are nicely into the double-digits? And we think about your guide, it implies majority of your business will be in networking by the end of the year. So why shouldn't your margins be a lot higher than they are? Just talk us through that spread. Thanks a lot.

Hey Todd, so of course our communications business has a lot of -- is what our networking business is. There's a substantial amount of growth in there. It includes a lot of our HPS revenue, but it also includes EMS revenue as well. We do manufacture communications gear for leading OEMs that are sometimes selling into the small medium business side of things, sometimes selling into the hyperscaler side of things. So you need to think about communications on a blended basis. The way I would characterize the margins overall though is that, look CCS had record operating margins in the fourth quarter 7.9%. And our HPS business is accretive to that. And so as we continue to grow HPS types of revenue, it provides an opportunity for continuing margin expansion. The majority of our HPS portfolio today is switches. And so we would expect to see some margin expansion. It'll also lift up the communications numbers. But the best way to think about more of an apples-apples comparison, if you're thinking about an ODM as an example, would be how does our HPS business perform relative to those ODMs. And we're not that, we're all in pretty much the same zip code.

That's great. Thanks for that color. And then I just want to go back to DeepSeek as well. So is your takeaway at this point that it's going to drive custom silicon demand at the expense of merchant silicon and that's an incremental driver? Thanks a lot.

Yes, in terms of the custom silicon demand, that's where we play and our view is that that's the growing market. Custom silicon is really around specialized AI applications. And we feel that's the place that we're focusing on where the majority of the growth flow actually comes from.

Great. Thanks a lot. Appreciate the color.

Thank you. There are no further questions at this time. I will now hand the call back to Rob Mionis for the closing remarks.

Thank you, Operator. And again, thank you for joining us this morning. 2024 was a solid year for us, and we're looking forward on building on this positive momentum as we get further into 2025. The products that we have in development, combined with our recent wins, also gives us confidence in our long-term outlook, and our future is certainly quite bright. We look forward to updating you next quarter, and have a wonderful day.

Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect your lines.