SILC

Image source: The Motley Fool. Wednesday, July 29, 2026 at 9:00 a.m. ET President and Chief Executive Officer - Liron Eizenman Chief Financial Officer - Eran Gilad Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Silicom Second Quarter 2026 Results Conference Call. 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 now like to hand over the call to Mr. Kenny Green of EK Global Investor Relations. Mr. Green, would you like to begin, please? Kenny Green: Thank you, operator. I would like to welcome all of you to Silicom's Second Quarter 2026 Results Conference Call. Before we start, I would like to draw your attention to the following safe harbor statement. During this call, we may make forward-looking statements within the meaning of applicable securities laws. These statements may include, among other things, statements regarding the company's strategy, market opportunities, customer demand, product development initiatives, industry trends, expected deployments of the company's solutions, financial outlook, revenue expectations, margins, operating expenses, profitability and future growth opportunities. These statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements. These risks include, among others, those described in the company's press release issued today and in its filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. The company undertakes no obligation to update any forward-looking statements. With us on the line today are Mr. Liron Eizenman, President and CEO; and Mr. Eran Gilad, CFO. Liron will begin with an overview of the results, followed by Eran, who will provide the analysis of the financials. We will then turn the call over to the question-and-answer session. And with that, I'd now like to hand the call over to Liron. Liron, please go ahead. Liron Eizenman: Thank you, Kenny, and good day, everyone. I'm very happy to share a truly outstanding set of results for the second quarter of 2026, results that came in significantly ahead of our expectations and that demonstrate the clear success of our strategic plan. Looking ahead and from our perspective in mid-2026, I have rarely been more excited about Silicom's strong momentum, upcoming potential, and the trajectory ahead. The second quarter was an exceptionally good one for Silicom, and it marks a clear acceleration of the growth inflection we talked about earlier this year. Revenues for the second quarter came in at $23.8 million, up a very strong 59% year-over-year and well ahead of the $20 million to $21 million guidance range we shared with you last quarter. Our strategic plan for the core business is tracking well ahead of our original expectations from when we first launched the plan. Our highly predictable platform of recurring revenue built on years of design win momentum, combined with the upside from our growth engine, is now driving a key inflection point in our business. You can see it clearly in the increasing trajectory of our revenue growth. 2 quarters ago, in Q4 2025, we reported 17% year-over-year growth. Then we accelerated to 33% growth last quarter and now a further step up to 59% in the current quarter. Beyond that, we are maintaining and even further building on this momentum with the guidance for the next quarter, implying a further acceleration to 66% year-over-year growth at the upper end. This is a powerful accelerating trend, and it reflects the compounding contribution of our multiple recent design wins as they ramp. Importantly, our visibility into the remainder of this year has improved markedly over the past few months. As a result, we are raising our revenue guidance for the full year 2026 significantly to a range of $93 million to $95 million, up from our previous guidance of $82 million to $83 million. This higher guidance reflects the better-than-expected improvement in our core business and is further supported by the additional multimillion-dollar revenues that we now expect from AI inference production orders in 2026. We have discussed many times that the long-term growth and strength of our core business are best tracked via our design win momentum. As you may remember, for 2026 as a whole, we targeted between 7 and 9 new design wins. I'm very pleased to report that we are just over halfway through the year, and we've already secured 7 new design wins. This means we are well on track to meet and to even exceed the upper end of the range. Those design wins achieved in recent months are the foundation for continued strong growth into next year and beyond. I want to spend a few moments discussing the design wins that we secured during the second quarter and more recently. During the quarter, in April, we announced an FPGA Smart NIC design win with a European leader in advanced encryption and secure communication solutions. The customer selected our solution following a successful evaluation, testing the performance and reliability required for its advanced encryption solutions, including post-quantum cryptography. This was our third PQC design win as we continue to build post-quantum cryptography as an emerging future growth engine for silicon. We expect to scale towards an anticipated annual deployment of around $3 million. On top of that, we are in discussions regarding this customer's next-generation higher-speed FPGA Smart NIC, which is planned to launch in 2028, as well as potential full system solution combining a server with an FPGA Smart NIC, opportunities that could each add meaningfully to our future revenues for discount. A few weeks later in May, we announced our first-ever white label switching design win. This was a win with a $5 million per year potential with a Tier 1 global security leader. Seeking to move away from vendor lock-in, the customer decided to replace its existing proprietary switches from an incumbent industry leader with Silicon's open white label switch solutions. The customer selected a full range of silicon-designed white label switches as the networking infrastructure for its security platforms. First production orders are expected before the end of the year. More recently, in July, an existing blue-chip customer awarded us a new design win for a custom high-speed server adapter engineered to exact customer specifications for a specific use case. This win triples our expected business with this customer to nearly $10 million in 2027, a significant contribution to our growth in 2027 on top of the very strong growth we are already delivering in 2026. Those wins capture the essence of our strategy. First, each successful win opens the door to the next with satisfied customers coming back to us for additional products and additional use cases. Second, they reflect the compounding value of the long-term trusted supplier relationships we have cultivated over decades of operation with blue-chip customers. Together, they strengthen the visibility we have into continued growth in 2027 and beyond. Beyond the wins we already secured, our pipeline of potential opportunities remains very broad and deep, spanning all our core product lines, including systems, Smart NICs and FPGA-based solutions across both new and existing customers. We expect this pipeline to continue converting into design wins, laying the groundwork for sustained strong growth well beyond this year. Turning to our outlook for the third quarter. We expect revenues in the range of $25 million to $26 million, representing accelerated 66% year-over-year growth at the upper end of the guidance. For the full year, as I mentioned earlier, we raised our revenue guidance to a range of $93 million to $95 million, representing over 50% year-over-year growth. I want to emphasize a particularly important milestone: Driven by our strong execution and the significant inherent leverage in our business model, we now expect to return to quarterly non-GAAP profitability during the second half of this year, significantly earlier than we had originally anticipated. This is a meaningful inflection point for Silicom and a clear demonstration of the earnings power that our rapidly growing revenues are beginning to unlock. Let me now turn to the exciting progress we are making in the AI inference market. We are very pleased with the tangible strong progress we achieved on the AI front in less than 9 months. I want to highlight a few of our key AI-related engagements. Recently, we secured a design win with a pioneering AI inference acceleration provider and received the first production order from this customer. This is an important milestone, establishing a foundation for what we believe can become an exceptional revenue stream. Additionally, we successfully customized an AI NIC solution to meet the customer-specific needs, delivered the first unit to the customer for evaluation, and are preparing for initial deliveries of this customized product per purchase order received from the customer, a leading AI inference ASIC and infrastructure vendor. In parallel, we are expanding our AI inference product portfolio. And based on orders secured, we are now developing a completely new bespoke inference-specific solution. We are witnessing AI spending shift decisively from training to inference, and the rise of disaggregated inference architectures is positioning Silicom as a key player, bringing our networking know-how and building blocks to the architectures that power those workloads and creating significant new opportunities for us along the way. We view our rapid progress and expanding footprint in AI inference as a potential game changer for Silicom, and successfully capitalizing on this generational shift will significantly enhance our long-term growth trajectory. This brings me to our balance sheet, which remains exceptionally strong and provides us with the flexibility to invest in our growth while maintaining a conservative financial profile. At the end of June, our working capital and marketable securities totaled $107 million, representing approximately $19 per share, including $55 million in cash, cash equivalents, and highly rated marketable securities with no debt. In summary, this was an outstanding quarter, and it's an exciting time for Silicom. Our core business is accelerating rapidly with 59% year-over-year growth in the second quarter and third quarter guidance pointing to accelerated 66% growth at the upper end. At the same time, we are making fast and exciting progress on our AI inference upside. Our design win engine is firing on all cylinders with the lower end of our full year target already reached in only half a year. On the strength of this momentum and improved visibility, we have raised our full year revenue guidance to $93 million to $95 million, and we now expect to return to quarterly non-GAAP profitability in the second half of this year. This quarter demonstrates again the exceptional performance of our core business, which is the foundation for everything else we're doing. It is the success of our strategic plan and the strength of our core that gives us the platform, the customer relationships, and the balance sheet strength to invest in AI inference and other additive growth engines, each of which is an expansion of our core expertise, capabilities, customer base, and the same IP routes. We could not be more excited about Silicom's strong and accelerating momentum, and we are moving with confidence and determination to fully capture the opportunities ahead. We look forward to delivering strong and accelerating returns for our shareholders in the quarters ahead and over the long term. With that, I will now hand over the call to Eran for a detailed review of the quarter results. Eran, please go ahead. Eran Gilad: Thank you, Liron, and good day to everyone. I will review the financial results and business performance for the second quarter of 2026. Before beginning the financial overview, I would like to remind you that unless otherwise indicated, all financial results are non-GAAP. A full reconciliation of our results on a GAAP to non-GAAP basis is available in the press release issued earlier today. We are very happy with our revenues for the second quarter of 2026, which were $23.8 million, 59% above the $15 million reported in the second quarter of last year. The geographical revenue breakdown over the last 12 months was as follows: North America, 79%; Europe and Israel, 13%; Far East and rest of the world, 8%. During the last 12 months, we had 2 10%-plus customers, which accounted for about 23% of our revenues, not above, but about 23% of our revenues. Gross profit for the second quarter of 2026 grew 51% to $7.2 million compared to a gross profit of $4.8 million in the second quarter of 2025. I note that our gross margin of 30.4% in the quarter is at the upper part of our short- to midterm expected gross margin range of 27% to 32%. Operating expenses in the second quarter of 2026 were $8.3 million compared with $7.2 million reported in the second quarter of 2025. I highlight that this is an increase of only 16% year-over-year compared with 59% revenue growth, a clear demonstration of the operating leverage inherent within our business model. Operating loss for the second quarter of 2026 was reduced to $1.1 million, a solid improvement from the operating loss of $2.4 million reported in the second quarter of 2025. This narrowing of the operating loss reflects the operating leverage inherent in our model as our revenue returned to strong growth and points clearly to the improving profitability profile we expect to deliver as our growth accelerates. Net loss for the quarter was reduced to $0.9 million, a 54% improvement compared with the net loss of $2 million in the second quarter of 2025. We are very pleased with the pace at which we are closing the gap to profitability, and we expect to return to quarterly non-GAAP profitability during the second half of this year, significantly earlier than we had originally anticipated. Loss per share in the quarter was $0.16, a significant improvement compared with a loss per share of $0.35 as reported in the second quarter of last year. Now turning to the balance sheet. As of June 30, 2026, our working capital and marketable securities amounted to $107 million, including $71 million in high-quality inventory and $55 million in cash, cash equivalents, and highly rated marketable securities with no debt. I would like to add a few words on the increase in inventory. We are intentionally building our inventory, both to support our strong revenue trajectory and to safeguard our ability to ensure uninterrupted product delivery to our customers. This is a deliberate proactive step, and we are leveraging our balance sheet strength to take it, effectively mitigating the impact of the currently extended lead times for memory chips and positioning us well to continue capitalizing on the growth opportunities ahead. That ends my summary. I would like to hand back to the operator for a question-and-answer session. Operator? Operator: The first question is from Ryan Koontz of Needham & Company. Ryan Koontz: And just terrific results, guys. Really nice to see the business inflecting. Reflecting here on your accelerating revenue here in the first half of the year, are there any particular market verticals you'd point out use cases that are particularly strong within your core business that are resulting in the outperformance here in the first half or in the second quarter? Liron Eizenman: So first of all, Ryan, thank you very much. And I would say, I mean, what we're seeing basically is the core business. So core business is booming, and the core business is, I mean, across the board, across all the product lines, if it's FPGA, if it's our standard adapters, if it's acceleration adapters, if it's our edge systems, all of that is really, really growing in revenue. And all the new stuff is actually not even reflected in the revenues yet. Even the switches we announced, they will start only later in the year and will actually ramp up significantly more next year. Same for the AI story and the PQC. So I wouldn't say there's a specific market or domain, but it's really, really our core business that is driving all the growth. Understood. Ryan Koontz: And with regards to -- you've been able to hold gross margins in here pretty well given the creep up in COGS, I'm sure. I assume with your open BOM strategy here with your customers that you've been able to raise price, and has pricing contributed to some of the revenue outperformance, pricing per unit? Liron Eizenman: First of all, it's a lot of hard work. So it's not easy to do that. We have a dedicated team that's working very, very hard on sourcing the components at the best prices possible, and it's relationships of years and years and years that we have with manufacturers and suppliers and silicon vendors that allow us to get access to those guys, speak with them, and try to get the best prices possible and also availability, which is not easy nowadays. And on top of that, yes, it's the work with the customers, keeping them updated all the time with the situation, making sure they get from us a view of how we see the industry, what the challenges are, where we need them to help us, and sometimes we're working together to find good solutions. Eventually, all of that is leading us to the result that you mentioned, which is exactly that. We are able to maintain the gross margin. And one more thing I would like to add on top of that is that because of our very strong balance sheet, we are able, and Eran mentioned that before, to build significant inventory intentionally, not by mistake; that allows us, in some cases, to keep the prices down for a very long time by buying ahead. All of that hard work, together with our strong balance sheet and very dedicated customers that we're working with for years, allows us to actually create this result that you mentioned. Ryan Koontz: With regards to memory costs, they've obviously been just skyrocketing. I've heard from other vendors that they are in the midst of, in some cases, redesigning products with lower memory. Is that something you're looking at in some cases? Or are your customers pretty pleased with your products and where they're at today? Liron Eizenman: We definitely do those kinds of things. It depends on the customers. So as I said, everything is a discussion with the customer for us. So in some cases, it's not even a design change. Sometimes the design itself can have more memory or less memory or more storage or less storage. And we did have cases where we discussed with the customers, and when memory and storage were, let's call it, cheap a year ago or 18 months ago, then someone would say, okay, give me a little bit more memory. It doesn't cost me too much. I don't know if I really need it, but put it in the product. And we definitely worked with some customers, with all customers. Some of them wanted to make the changes. Some of them didn't want to make the changes. And definitely, we had some changes in some products in order to support our customers better and get them to a price point that still allows them to sell the product. But yes, we do see generational shifts. It depends if a customer was maybe on a product that was using DDR4 and wanted to move forward to DDR5. Not necessarily; they immediately see the impact of that because DDR5 prices are also increasing, but maybe over time, they will see it. So we are working with the customers very closely to see if they want to move to a new product or a different product that may give them a better price, or maybe they just want to change the spec for the existing one. It's a lot of work together with the customers. And one of the things, as I think about it, one of the things we are very proud of is that we are able to customize and do modifications very, very quickly with customers. So that's one of the key things that we managed to move customers very quickly to new platforms when they wanted to do so. So it was almost for them kind of transparent. I mean, it's completely smooth. Ryan Koontz: Really helpful. That's great. And with regards to your increased guidance on the balance of the year, you did mention, I think, that your inference customer and maybe your switch product is beginning to contribute. Can you give us a rough magnitude of how much these brand-new design wins secured in '26 are contributing to your end-of-year revenue? Liron Eizenman: Just to make sure, are you asking about AI inference in 2026? Ryan Koontz: Yes. Yes, AI inference and any other major design wins that you've recently secured? Liron Eizenman: So that's a little bit different. So for the AI inference, I would say the total number that you can put in your head or in your models for 2026 is in the range of $3 million to $4 million. That is roughly the number that we expect for this year. Obviously, 2027 numbers would be much, much higher. And for the other design wins, yes, some of them are ramping up quicker. Some of them take a little bit more time. It depends on the product. Some of them do contribute more revenue for this year, some of them less. But overall, I would say, design wins we announced in 2026 will probably not be fully mature and fully at run rate in 2026, but 2027 or 2028 are more likely years to be full run rate. Ryan Koontz: And then maybe just lastly on this inference design win. I know there's a lot of excitement from investors about that. Can you maybe summarize some of the intellectual property and some of the advantages you have that contribute to that sort of design win in the AI inference domain? Liron Eizenman: Yes. So I mean, for competitive reasons, I would limit myself at some point. But still, I mean, we are still focusing on the know-how that Silicom has and that we built over many, many years. And we now see a lot of, I would say, 2 areas. One is networking challenges. And the other is compute challenges. So on the networking challenges, everything that we built over the many, many years, if it's around FPGA or if it's around other ASICs that we have, if it's around PCIe switches or anything else and understanding also what are the challenges in the architecture and having the right people to have the right discussions where the customers understand those pains, all of that together is allowing us to understand the pain and come up with a solution and do it quickly because we have the building blocks to really provide customers very quickly a solution they can try out. And then even if we need to do some customization on top of that, we can do it very quickly. So that's one area. And the other area, as I mentioned on the compute, which is mainly on the FPGA side is actually doing inference on the FPGA, and we mentioned that in the past is what we call the hardware lottery, where actually, if you're doing an ASIC, you are locked down for many years, and if you're doing it on FPGA, you actually can update all the time. And as models progress over time, you can actually take all the new goodies that you have and all the industry that is doing smart things every day and put it into your FPGA and actually run models quicker and better than what you did yesterday. So again, it's all based on the same fundamentals that we have for our core business, but it's targeted in a different way and built specifically for AI inference. Operator: The next question is from Greg Weaver of Invicta Capital. Gregory Weaver: Great quarter. Since the core business seems to be driving these results, can you maybe flesh out a little bit what's been a surprise, I guess, in terms of how things have gotten pulled in? And what's caused the acceleration that you didn't anticipate, say, 6 or 9 months ago? Liron Eizenman: As I'm trying to think about the answer to how to provide it, I would say no single customer or a single industry that is creating it. I think it's more of all of the design wins that we had and we won in the last 18 months, all of them ramping up. And as always, some customers are more successful than they anticipated; some are less successful than the one they anticipated. But we see a very strong demand for all of those design wins that we accumulated over the last 18 months. Obviously, those that were accumulated this year take a little bit more time, but those that we won maybe a year ago are really ramping up very, very nicely. And another point that I can mention is that we are usually conservative in the numbers that we provide. But it's not that we are completely blown out. We've seen some of the, let's say, hints to this growth coming in, but now we definitely see it coming, and also with our projection going forward, you can see it. Gregory Weaver: From a gross margin outlook perspective, obviously, there are some moving parts here with some of this new business coming on and, say, some of this inference ramping. Do you foresee much of a change as a result? Liron Eizenman: I think we expect the same. We don't think it will change dramatically. Gregory Weaver: And just lastly, maybe if you could just address here for everybody on the call about the shelf. There seems to be a lot of consternation around that. And maybe just talk to that and what the thought process was there. Liron Eizenman: The filing is strictly standard corporate housekeeping. We like to maintain an active shelf to ensure we have maximum financial flexibility. Our focus right now is executing on the momentum as we're seeing it. If we experience higher-than-expected growth in our core business or see an opportunity to aggressively scale alongside the accelerating demand for our AI inference solution, this simply gives us the agility to support that working capital efficiently. Gregory Weaver: So I mean, you think you could buy that much inventory, or you need that much receivables working capital ramp that you'd absorb $50 million in cash you got on the balance sheet now in the next 6 months? Liron Eizenman: Yes, we believe so. Gregory Weaver: You could ramp working capital that hard. Liron Eizenman: Sorry, I don't think I understood your question. Can you repeat? Gregory Weaver: Right. You have $50 million plus of cash and equivalents on the balance sheet currently, correct? Liron Eizenman: Correct. Gregory Weaver: Right. Would you need to use that much cash for working capital needs in the next 6 months, do you foresee? Liron Eizenman: I think that if we need it, it will maybe be for AI if it really ramps up to the very, very high volumes. Operator: There are no further questions at this time. Before I turn the call over to Mr. Eizenman to go ahead with his closing statement, I would like to remind participants that a replay of this call will be available tomorrow on Silicom's website, www.silicom-usa.com. Mr. Eizenman, would you like to make a concluding statement? Liron Eizenman: 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. Operator: Thank you. This concludes Silicom's Second Quarter 2026 Results Conference Call. Thank you for your participation. You may go ahead and disconnect. 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This article first appeared on GuruFocus. Revenue: $23.8 million, up 59% year-over-year. Gross Profit: $7.2 million, up 51% year-over-year. Gross Margin: 30.4%, at the upper end of the expected 27%-32% range. Operating Expenses: $8.3 million, up 16% year-over-year. Operating Loss: Reduced to $1.1 million from $2.4 million in Q2 2025. Net Loss: $0.9 million, a 54% improvement from the $2 million loss in Q2 2025. Loss Per Share: $0.16, improved from $0.35 in Q2 2025. Working Capital and Marketable Securities: $107 million, including $55 million in cash equivalents and marketable securities, with no debt. Q3 2026 Revenue Guidance: $25 million to $26 million, implying up to 66% year-over-year growth. Full-Year 2026 Revenue Guidance: Raised to $93 million to $95 million, representing over 50% year-over-year growth. Warning! GuruFocus has detected 3 Warning Signs with SILC. Is SILC fairly valued? Test your thesis with our free DCF calculator. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Silicom Ltd (NASDAQ:SILC) reported exceptional Q2 2026 revenue of $23.8 million, a 59% year-over-year increase, significantly exceeding guidance and demonstrating a clear acceleration in growth. The company raised its full-year 2026 revenue guidance to $93-$95 million, up from the previous $82-$83 million, reflecting improved visibility and stronger-than-expected core business performance. Silicom Ltd (NASDAQ:SILC) has already secured seven new design wins in the first half of 2026, putting it on track to exceed its full-year target of seven to nine, which supports future growth. The company expects to return to quarterly non-GAAP profitability in the second half of 2026, earlier than originally anticipated, highlighting the operating leverage in its business model. Silicom Ltd (NASDAQ:SILC) is making strong progress in the AI inference market, securing design wins and production orders, which could become a significant new revenue stream. The company maintains a strong balance sheet with $107 million in working capital and marketable securities, no debt, and is strategically building inventory to mitigate supply chain risks. Gross margin of 30.4% in Q2 2026 was at the upper end of the expected range, supported by effective sourcing and customer collaboration despite rising component costs. Silicom Ltd (NASDAQ:SILC) still reported a net loss of $0.9 million in Q2 2026, though improved from a $2 million loss in the prior year, indicating profitability has not yet been achieved. The company faces extended lead times for memory chips, which could impact its ability to deliver products on time and increase costs. Gross margin of 30.4% is at the upper end of the expected range, but the company expects it to remain within the 27-32% range, limiting potential for margin expansion. The AI inference revenue contribution for 2026 is expected to be only $3-$4 million, which is relatively small compared to the overall revenue, and its long-term impact remains uncertain. The company's recent design wins, including the white label switch and AI-related products, are not expected to fully ramp until 2027 or 2028, meaning near-term revenue growth relies heavily on existing core business. Silicom Ltd (NASDAQ:SILC) has a high customer concentration, with two customers accounting for 23% of revenues, which could pose a risk if one customer reduces orders. The company's intentional inventory buildup, while strategic, ties up cash and could lead to write-downs if demand shifts or component prices decline. Q: Can you provide a rough magnitude of how much your new design wins secured in 2026, including AI inference, will contribute to revenue by the end of the year? A: Liron Eizenman (President and CEO) stated that AI inference revenue for 2026 is expected to be in the range of $3 to $4 million, with 2027 numbers potentially being much higher. He noted that while some design wins are ramping up quicker than others, the design wins announced in 2026 will likely not be at full run rate until 2027 or 2028. Q: What has caused the acceleration in your core business that you didn't anticipate six or nine months ago? A: Liron Eizenman (President and CEO) attributed the acceleration to the compounding ramp-up of design wins accumulated over the last 18 months. He noted that there is no single customer or industry driving the growth, but rather a very strong demand across all the design wins, with those won about a year ago ramping up particularly nicely. Q: Are there any particular market verticals or use cases that are resulting in the outperformance in the second quarter? A: Liron Eizenman (President and CEO) explained that the growth is driven by the core business across all product lines, including FPGA, standard adapters, acceleration adapters, and edge systems. He emphasized that new initiatives like switches, AI, and PQC are not yet reflected in revenues, as they will start contributing later in the year and ramp up significantly more next year. Q: Given the rising COGS, have you been able to raise prices, and has pricing contributed to the revenue outperformance? A: Liron Eizenman (President and CEO) credited a dedicated team working on sourcing components at the best prices, leveraging years of relationships with suppliers. He highlighted that the company's strong balance sheet allows it to build significant inventories intentionally, buying ahead to keep prices down, which together with close customer collaboration has enabled the company to maintain gross margins. Q: With memory costs skyrocketing, are you redesigning products to use lower memory, or are customers satisfied with current products? A: Liron Eizenman (President and CEO) confirmed that the company works with customers on design changes when needed, such as adjusting memory or storage specs. He noted that some customers want to make changes while others don't, and the company's ability to customize and modify products quickly has allowed customers to move to new platforms smoothly, mitigating the impact of rising memory costs. Q: Can you summarize the intellectual property and advantages that contributed to your AI inference design win? A: Liron Eizenman (President and CEO) highlighted two key areas: networking challenges and compute challenges. On the networking side, the company leverages its years of expertise in FPGA, ASICs, and PCIe switches to understand architectural pain points and provide quick solutions. On the compute side, the company focuses on running inference on FPGAs, which allows for continuous updates as models progress, a concept he referred to as the "hardware lottery." Q: Do you foresee much of a change in gross margin outlook as new business and AI inference ramp up? A: Liron Eizenman (President and CEO) stated that the company expects gross margins to remain the same and does not anticipate dramatic changes as new business ramps. Q: Can you address the recent shelf filing and the thought process behind it? A: Liron Eizenman (President and CEO) described the filing as strictly standard corporate housekeeping to maintain maximum financial flexibility. He noted that if the company experiences higher-than-expected growth or sees an opportunity to aggressively scale with accelerating AI demand, the shelf provides the agility to support working capital efficiency. Q: Do you foresee needing to use the $50 million plus in cash for working capital needs in the next six months? A: Liron Eizenman (President and CEO) indicated that the cash would potentially be needed if AI ramps up to very high volumes, which he acknowledged would be a "fantastic high-level problem" to have. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Silicom Ltd? Here are five stocks we like better. Strong revenue growth: Second-quarter 2026 revenue jumped 59% year over year to $23.8 million, exceeding guidance. Silicom raised its full-year outlook to $93 million–$95 million and expects third-quarter revenue of $25 million–$26 million. Design wins and AI expansion: The company secured seven design wins so far in 2026, including opportunities in secure communications, switching and high-speed server adapters. AI-inference revenue is expected to reach approximately $3 million–$4 million this year and grow further in 2027. Improving profitability and financial flexibility: Gross margin was 30.4%, while the non-GAAP operating loss narrowed to $1.1 million and net loss fell 54% year over year. Management expects quarterly non-GAAP profitability in the second half of 2026; Silicom ended June with $107 million in working capital and marketable securities and no debt. Silicom (NASDAQ:SILC) reported second-quarter 2026 revenue of $23.8 million, up 59% from $15 million a year earlier and above the company’s prior guidance range of $20 million to $21 million. Management said the performance reflected accelerating demand across its core business, prompting it to raise full-year revenue guidance. President and CEO Liron Eizenman said the company’s growth has accelerated over the past three quarters, from 17% year-over-year growth in the fourth quarter of 2025 to 33% in the first quarter and 59% in the second quarter. Silicom expects third-quarter revenue of $25 million to $26 million, which would represent year-over-year growth of as much as 66% at the high end of the range. → This Tiny AI Supplier Could Be More Important Than the Chipmakers The company raised its full-year 2026 revenue outlook to $93 million to $95 million, from prior guidance of $82 million to $83 million. The updated forecast reflects better-than-expected performance in Silicom’s core operations as well as expected contributions from AI-inference production orders. Eizenman said growth in the quarter was broad-based across Silicom’s core product lines, including FPGA products, standard and acceleration adapters, and edge systems. He said newer opportunities in switching, post-quantum cryptography and AI inference were not yet major contributors to second-quarter revenue. → Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? Silicom reported that it had secured seven Design Wins through just over the first half of 2026, reaching the low end of its full-year target of seven to nine wins. Management said the Design Wins obtained over the past 18 months are ramping and supporting current growth, while more recent wins are expected to contribute more substantially in 2027 and 2028. In April, the company announced an FPGA SmartNIC Design Win with a European provider of advanced encryption and secure communications solutions. Silicom expects the deployment to scale toward about $3 million in annual revenue. The customer’s applications include post-quantum cryptography. In May, Silicom announced its first white-label switching Design Win with a tier-one global security provider. The opportunity has estimated potential of $5 million annually, with first production orders expected before the end of 2026. In July, an existing blue-chip customer selected Silicom for a custom high-speed server adapter. Management said the award is expected to triple business with that customer to nearly $10 million in 2027. Eizenman said the company’s pipeline remains broad across edge systems, SmartNICs and FPGA-based solutions for both new and existing customers. → Innovative ETF Strategies That Are Paying Off This Summer Management highlighted progress in AI inference, including a Design Win with an AI-inference acceleration provider and an initial production order from that customer. Silicom also said it customized an AI network interface card solution for a leading AI-inference ASIC and infrastructure vendor, delivered the first unit for customer evaluation and is preparing initial deliveries under a received purchase order. Based on orders obtained, Silicom is also developing a new inference-specific solution, Eizenman said. He estimated that AI-inference revenue could total roughly $3 million to $4 million during 2026, with 2027 revenue expected to be higher. Eizenman said Silicom sees AI spending shifting from training toward inference and views disaggregated inference architectures as an opportunity for its networking and FPGA capabilities. He said the company’s ability to customize products quickly and its experience in networking, FPGA technology, ASICs and PCIe switching helped it address customer requirements in the market. Chief Financial Officer Eran Gilad said second-quarter non-GAAP gross profit rose 51% year over year to $7.2 million. Gross margin was 30.4%, toward the upper end of Silicom’s stated short- to medium-term expected range of 27% to 32%. Operating expenses increased 16% to $8.3 million, compared with revenue growth of 59%. As a result, non-GAAP operating loss narrowed to $1.1 million from $2.4 million in the year-earlier period. Net loss narrowed 54% to $0.9 million, or $0.16 per share, from a net loss of $2 million, or $0.35 per share, a year earlier. Management said Silicom now expects to return to quarterly non-GAAP profitability during the second half of 2026, earlier than previously anticipated. Eizenman said the company does not expect a dramatic change in its gross-margin outlook as newer business begins to ramp. As of June 30, Silicom had $107 million of working capital and marketable securities, including $71 million in inventory and $55 million in cash, cash equivalents and highly rated marketable securities. The company had no debt. Gilad said inventory was intentionally increased to support revenue growth and protect product availability amid extended lead times for memory chips. Eizenman added that Silicom’s balance sheet enables it to purchase inventory in advance and work with customers on product specifications, including in some cases modifying memory or storage configurations to address pricing conditions. Addressing a shelf registration filing during the question-and-answer session, Eizenman characterized it as standard corporate housekeeping intended to preserve financial flexibility. He said additional working-capital needs could arise if AI-related demand ramps to very high volumes. Silicom Ltd. is an Israel‐based provider of advanced networking infrastructure products designed to enhance data throughput, security, and functionality in enterprise, cloud, telecommunications, and edge‐computing environments. The company develops and manufactures a range of network interface cards (NICs), specialized adapters, and turnkey network appliances that support high‐performance packet processing, encryption, compression, and traffic optimization. Silicom's solutions are engineered to offload complex network functions from central processing units, enabling customers to achieve greater efficiency, reliability, and scalability in their data centers. Founded in 1987 and headquartered in Lod, Israel, Silicom has grown from a niche hardware developer into a global supplier of connectivity and networking solutions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Silicom Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

- 59% revenue growth driven by continued expansion of core business - - Return to quarterly bottom-line profitability projected by end of year - KFAR SAVA, Israel, July 29, 2026 /PRNewswire/ -- Silicom Ltd. (NASDAQ: SILC), an industry-leading provider of high-performance server/appliance networking solutions, today reported its financial results for the second quarter ended June 30, 2026. Financial Results Second quarter: Silicom's revenues for the second quarter of 2026 rose 59% to $23.8 million compared with $15.0 million for the second quarter of 2025. On a GAAP basis, the company's net loss for the quarter totalled $2.1 million, or $0.37 per ordinary share (basic and diluted), a 37% improvement compared with $3.3 million, or $0.59 per ordinary share (basic and diluted), for the second quarter of 2025. On a non-GAAP basis (as described and reconciled below), net loss for the quarter totalled $0.9 million, or $0.16 per ordinary share (basic and diluted), compared with $2.0 million, or $0.35 per ordinary share (basic and diluted), for the second quarter of 2025. First Six Months: Silicom's revenues for the first half of 2026 rose by 46% to $42.9 million from $29.4 million for the first half of 2025. On a GAAP basis, net loss for the period totalled $4.5 million, or $0.78 per ordinary share (basic and diluted), a 27% improvement compared with $6.1 million, or $1.08 per ordinary share (basic and diluted), for the first half of 2025. On a non-GAAP basis (as described and reconciled below), net loss for the period totalled $2.4 million, or $0.41 per ordinary share (basic and diluted), a 42% improvement compared with $4.1 million, or $0.71 per ordinary share (basic and diluted), for the first half of 2025. Guidance Based on the faster-than-projected growth of our core business, our third quarter revenues are expected to reach $25-$26 million, representing 66% growth year-over-year at the upper end of the guidance. With the continued strong momentum of our core business and the additional multi-million-dollar revenues expected from AI-Inference production orders, we are now raising our full-year revenue guidance significantly to $93 to $95 million, representing more than 50% growth on a year-over-year basis. Comments of Management Liron Eizenman, Silicom's President and CEO, commented, "We are pleased to report 59% year-over-year revenue growth for the quarter and to project continued strong momentum in the quarters ahead. Based on our current trajectory and the leverage inherent in our business model, we now expect to return to quarterly non-GAAP profitability during the second half of the year, significantly earlier than originally anticipated. These results validate our strategic roadmap, which combines the strength of our established, fast-growing core business with the game-changer growth potential of the rapidly expanding AI-Inference market. Together, these complementary growth engines position Silicom to deliver sustainable, long-term value creation. "Execution across the business has been exceptionally strong. So far this year, we secured seven new Design Wins, already reaching the lower end of our full-year target of seven to nine wins. These Design Wins demonstrate not only the competitiveness of our technology, but also the long-term value of the trusted relationships we have cultivated over decades with blue-chip customers. These relationships continue to generate recurring opportunities, with each Design Win opening the door to the next, strengthening the visibility we have into continued growth in 2027 and beyond." Mr. Eizenman continued, "Equally important, we achieved a major strategic milestone during the quarter with our first production order for an AI-Inference-specific solution. This marks the commercial launch of our AI-Inference product family and establishes a foundation for what we believe can become an exceptional revenue stream. In parallel, we continue to advance multiple AI-Inference development programs and proof-of-concept projects with customers, capitalizing on the increasing shift in AI infrastructure spending from training to inference at scale." Mr. Eizenman concluded, "Looking ahead, we have never been more confident in Silicom's outlook. Our core business continues to outperform expectations, and our AI-Inference initiatives are progressing rapidly. Supported by a strong balance sheet and solid cash position, we have the financial flexibility to invest aggressively in these opportunities while maintaining financial discipline. We believe that Silicom is entering a new phase of accelerated revenue growth, expanding profitability, and long-term value creation for our shareholders. With a strong foundation in place, we remain fully focused on disciplined execution and creating lasting value for our customers and shareholders." Conference Call Details Silicom's Management will host an interactive conference today, July 29th, at 9am Eastern Time (6am Pacific Time, 4pm Israel Time) to review and discuss the results. To participate, investors may either listen via a webcast link hosted on Silicom's website or via the dial-in. The link is under the investor relations' webcast section of Silicom's website at https://www.silicom-usa.com/webcasts/ For those that wish to dial in via telephone, one of the following teleconferencing numbers may be used: US: 1 866 860 9642ISRAEL: 03 918 0609INTERNATIONAL: +972 3 918 0609At: 9:00am Eastern Time, 6:00am Pacific Time, 4:00pm Israel Time It is advised to connect to the conference call a few minutes before the start. For those unable to listen to the live call, a replay of the call will be available for three months from the day after the call under the above-mentioned webcast section of Silicom's website. About Silicom Silicom Ltd. is an industry-leading provider of high-performance networking and data infrastructure solutions. Designed to optimize performance and efficiency in Cloud, Data Center and Edge environments, Silicom's solutions increase throughput and minimize latency, serving as the infrastructure backbone for today's most critical technologies. Our innovations empower high-demand workloads across Artificial Intelligence (AI) inference, SD-WAN, SASE, cyber security, fabric switching, NFV, and more. Our comprehensive portfolio, including high-speed server adapters, advanced hardware offloading and acceleration engines, AI NICs, FPGA-based smart cards, Post Quantum Cryptography (PQC) hardware accelerators, white label switches and Edge CPEs, is used by Tier-1 customers throughout the world, including cloud players, service providers and OEMs, to enable their networks to scale efficiently. With engineering excellence, a strong financial position and a legacy of over 400 active Design Wins, Silicom serves as the "go-to" connectivity and performance partner for technology leaders around the globe, and drives the next generation of infrastructure. For more information, please visit: www.silicom.co.il Statements in this press release which are not historical data are forward-looking statements within the meaning of applicable securities laws which involve known and unknown risks, uncertainties, or other factors not under the company's control, which may cause actual results, performance, or achievements of the company to be materially different from the results, performance, or other expectations implied by these forward-looking statements. For example, when the Company discusses its revenue outlook or guidance for future periods, growth opportunities, market demand for its products and solutions, expected customer deployments, the scalability of its business model, operating performance, strategic partnerships, technology leadership, or industry trends affecting cloud infrastructure, artificial intelligence workloads, networking acceleration technologies or telecommunications markets, it is using forward-looking statements. Additional factors include, but are not limited to, Silicom's dependence for substantial revenue growth on a limited number of customers, industry trends affecting networking and data center infrastructure, including the migration to cloud architectures, disaggregation of networking systems and the separation of hardware and software solutions; the pace of adoption of emerging technologies such as artificial intelligence inference infrastructure; the timing and extent of market adoption of Silicom's new products and of new Design Wins achieved by Silicom; fluctuations in customer purchasing cycles and the timing of customer deployments; protection of intellectual property, changes in exchange rates; and the wars in Gaza, Lebanon and with Iran, as well as the war in the Ukraine, and existing and potential disruptions to global shipping routes such as the Straits of Hormuz and the Red Sea. Further information about the company's businesses, including information about factors that could materially affect Silicom's results of operations and financial condition, are discussed in our Annual Report on Form 20-F and other documents filed by Silicom and that may be subsequently filed by the company from time to time with the SEC. These forward-looking statements can generally be identified as such because the context of the statement will include words such as "expect," "should," "believe," "anticipate" or words of similar import. Similarly, statements that describe future plans, objectives or goals are also forward-looking statements. In light of significant risks and uncertainties inherent in forward-looking statements, the inclusion of such statements should not be regarded as a representation by Silicom that it will achieve such forward-looking statements. The company disclaims any duty to update such statements, whether as a result of new information, future events, or otherwise. Non-GAAP Financial Measures This release, including the financial tables below, presents other financial information that may be considered "non-GAAP financial measures" under Regulation G and related reporting requirements promulgated by the Securities and Exchange Commission (the "SEC") as they apply to our company. These non-GAAP financial measures exclude compensation expenses in respect of options and RSUs granted to directors, officers and employees, as well as lease liabilities - financial expenses (income). Non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, GAAP financial measures. The tables also present the GAAP financial measures, which are most comparable to the non-GAAP financial measures as well as reconciliation between the non-GAAP financial measures and the most comparable GAAP financial measures. The non-GAAP financial information presented herein should not be considered in isolation from or as a substitute for operating income (loss), net income (loss) or per share data prepared in accordance with GAAP. Company Contact:Eran Gilad, CFOSilicom Ltd.Tel: +972-9-764-4555E-mail: [email protected] Relations Contact:Ehud HelftEK Global Investor RelationsTel: +1 212 378 8040E-mail: [email protected] -- FINANCIAL TABLES FOLLOW – View original content to download multimedia:https://www.prnewswire.com/news-releases/silicom-reports-q2-2026-results-302837654.html

- Conference Call Scheduled for Wednesday, July 29, 2026 at 9:00am ET - KFAR SAVA, Israel, July 1, 2026 /PRNewswire/ -- Silicom Ltd. (NASDAQ: SILC), an industry-leading provider of high-performance server/appliances networking solutions, announced today that it will be releasing its second quarter 2026 results on Wednesday, July 29, 2026. The Company will be hosting a conference call on that same day at 9:00am Eastern Time. On the call, management will review and discuss the results, and will also be available to answer investors' questions, following the prepared remarks. To participate, investors may either listen via a webcast link hosted on Silicom's website or via the dial-in. The link will be under the investor relations webcast section of Silicom's website at https://www.silicom-usa.com/webcasts/ For those that wish to dial in via telephone, one of the following teleconferencing numbers may be used: US: 1 866 860 9642ISRAEL: 03 918 0609INTERNATIONAL: +972 3 918 0609At: 9:00am Eastern Time, 6:00am Pacific Time, 4:00pm Israel Time It is advised to connect to the conference call a few minutes before the start. For those unable to listen to the live call, a replay of the call will be available for three months from the day after the call under the above-mentioned webcast section of Silicom's website. About Silicom Silicom Ltd. is an industry-leading provider of high-performance networking and data infrastructure solutions. Designed to optimize performance and efficiency in Cloud, Data Center and Edge environments, Silicom's solutions increase throughput and minimize latency, serving as the infrastructure backbone for today's most critical technologies. Our innovations empower high-demand workloads across Artificial Intelligence (AI) inference, SD-WAN, SASE, cyber security, fabric switching, NFV, and more. Silicom's comprehensive portfolio, including high-speed server adapters, advanced hardware offloading and acceleration engines, AI NICs, FPGA-based smart cards, Post Quantum Cryptography (PQC) hardware accelerators, white label switches and Edge CPEs, is used by Tier-1 customers throughout the world, including cloud players, service providers and OEMs, to enable their networks to scale efficiently. With engineering excellence, a strong financial position and a legacy of over 400 active Design Wins, Silicom serves as the "go-to" connectivity and performance partner for technology leaders around the globe, and drives the next generation of infrastructure. For more information, please visit: www.silicom.co.il Company Contact:Eran Gilad, CFOSilicom Ltd.Tel: +972-9-764-4555E-mail: [email protected] Investor Relations Contact:Ehud HelftEK Global Investor RelationsTel: +1 212 378 8040E-mail: [email protected] Logo: https://mma.prnewswire.com/media/733229/Silicom_Ltd_Logo.jpg View original content:https://www.prnewswire.com/news-releases/silicoms-second-quarter-2026-results-release-scheduled-for-july-29-2026-302815481.html

(Bloomberg) -- Apple Inc. reports quarterly earnings after the close on Thursday, but investors will be largely looking past the numbers and seeking clues to incoming Chief Executive Officer John Ternus’ strategic plans. Most Read from Bloomberg US Seeks to Deploy Hypersonic Missile for the First Time Against Iran North Korea Confirms Suicide Rule for Soldiers Ukraine Captures Two NJ Malls Separated by Just Four Miles — and Very Different Fates Junior Bankers Sick of Grunt Work Build $2 Billion AI Tool to Do the Job Meta Shares Plunge on Rising Concern About AI Spending Spree The iPhone maker announced last week that Ternus, its current head of hardware infrastructure, will take over for CEO Tim Cook on Sept. 1. That makes Apple’s fiscal second-quarter earnings report, outlook and conference call the first significant opportunity for Wall Street to get a reading on the new leader’s priorities. It isn’t clear if Ternus will appear on the call, and a company spokesperson declined to comment. “It isn’t really about the numbers,” said Anthony Saglimbene, chief market strategist at Ameriprise. “We want to know what the CEO transition looks like.” Ternus is taking over at a complex time for one of the world’s biggest companies, which is expected to debut a number of major products in upcoming months — notably a foldable iPhone. But while growth trends are improving, Apple has been grappling with skyrocketing costs for key components like memory chips and a volatile macro backdrop driven by the war in Iran and advances in AI that have minted stock market winners and losers. “Investors have reason to be excited about Ternus since he was an overseer of some of Apple’s most successful recent products, but his strategy will be a long-term story,” said David Wagner, portfolio manager at Aptus Capital Advisors, which has about $14 billion in assets and holds Apple in a variety of portfolios. “In the short term, the impact of component costs will be the focal point.” Apple shares are up less than 1% this year after a relatively disappointing 8.6% gain in 2025. By contrast, the technology-heavy Nasdaq 100 Index is up 8.3% in 2026 and the S&P 500 Index has gained 4.9%. Apple’s stock was up 1.2% on Thursday afternoon. While the company is accelerating development of AI-powered hardware devices and features, it has also seen a number of delays with its own artificial intelligence products. However, Apple hasn’t followed its megacap peers in sinking tens of billions of dollars into building out AI infrastructure, which has diminished the stock’s correlation to the rest of the tech industry. Earnings from the four biggest spenders — Alphabet Inc., Amazon.com Inc., Meta Platforms Inc. and Microsoft Corp. — after the bell on Wednesday offered a mixed bag on that theme. For example, Meta shares were punished in extended trading after the Facebook parent raised its expectations for capital expenditures in 2026. Meanwhile Alphabet’s stock jumped as its cloud computing unit reported strong growth, signaling that its AI investments are starting to pay off. Wall Street expects Apple to report 19% earnings growth on a 15% jump in revenue, according to data compiled by Bloomberg. For the fiscal year, which closes at the end of September, analysts anticipate that revenue will climb 12%, nearly twice last year’s 6.4% pace and the fastest rate since 2021. However, that still trails the tech sector, which is expected to post revenue growth of more than 26% in 2026, according to Bloomberg Intelligence data. The relatively slow expansion has made Apple’s stock more expensive. The shares trade at nearly 30 times estimated earnings, a sizable premium to their 10-year average of roughly 23. That gives Apple the second-highest valuation among the Magnificent Seven group of tech giants, trailing only Tesla Inc. and its nosebleed multiple of more than 180 times forward earnings. “Apple is a quality name, which warrants a premium, but it continues to look pretty expensive relative to its growth,” said Matt Stucky, chief portfolio manager of equities at Northwestern Mutual Wealth Management Company, which manages around $5 billion. This setup could put more pressure on Ternus to chart a path to stronger long-term growth, according to Stucky. “If innovation from the new CEO can provide that, then there’s reason to be optimistic about Apple from here, and that optimism could keep the multiple strong or even push it higher,” he said. “Right now, we don’t know what that growth catalyst could be. If the strategy is more about grinding out market-share gains, keeping products refreshed, that would be good but not game-changing.” The soaring cost of memory chips is one of the biggest factors in the company’s outlook. Memory is a major part of the buildout of artificial intelligence infrastructure, and the aggressive spending on AI has created a supply crunch. An index of spot prices for dynamic random-access memory, or DRAM, chips has risen more than 500% since the end of August. That said, Apple is better positioned to absorb higher costs than many of its rivals due to its size and balance-sheet strength. For example, it recently rolled out a less expensive version of the MacBook designed to improve the company’s market share in lower-end laptops. However, the longer memory prices stay elevated the more the impact is expected to spread, potentially hitting Apple’s bottom line. “The stocks that have been hit the hardest are the ones that show some kind of margin degradation,” Aptus Capital’s Wagner said. “So if the memory headwind sticks around, it will start to become a margin risk for Apple. And given the valuation, there’s more room to the downside.” Tech Chart of the Day Top Tech Stories A frenzied day of earnings reports offered a glimpse at how some of the world’s biggest tech companies are doing in artificial intelligence. The upshot: Alphabet Inc.’s Google is seeing a clear payoff from its AI spending, while Meta Platforms Inc. is lagging behind. Alphabet reported high demand for its cloud and artificial intelligence offerings, boosting shares and giving investors confidence that its unprecedented investments in AI infrastructure will pay off. Meta Chief Executive Officer Mark Zuckerberg reignited fears that the historic levels of investment he’s making to catch up in the artificial intelligence race won’t pay off, a prospect that sent shares sliding after the company raised its spending outlook for the year. Amazon.com Inc. is spending at a rapid rate to expand data center capacity to meet the intense demand for artificial intelligence computing power, fueling the fastest quarterly sales growth for its cloud unit in more than three years. Microsoft Corp. said cloud computing revenue and spending on AI infrastructure will accelerate this year, a bid to convince investors that its huge bets on artificial intelligence are poised to pay off. Qualcomm Inc. rallied in premarket trading after the company said it was making headway in the lucrative data center market and predicted that the China phone industry would bounce back. Anthropic PBC has begun weighing a fresh funding round that would value the artificial intelligence developer at more than $900 billion, according to people familiar with the matter, potentially leapfrogging its longtime rival OpenAI as the world’s most valuable AI startup. OpenAI has met a key milestone for securing AI capacity in the US several years ahead of schedule, boosting the startup’s ambitious plans for data center expansion. Earnings Due Thursday Earnings Premarket: Asure Software Inc. (ASUR US) Bandwidth Inc. (BAND US) Cable One Inc. (CABO US) Diebold Nixdorf Inc. (DBD US) Entegris Inc. (ENTG US) InterDigital Inc. (IDCC US) L3Harris Technologies Inc. (LHX US) Silicom Ltd. (SILC US) Vistance Networks Inc. (VISN US) Earnings Postmarket: Cohu Inc. (COHU US) Apple Inc. (AAPL US) Axt Inc. (AXTI US) Dolby Laboratories Inc. (DLB US) Five9 Inc. (FIVN US) GoDaddy Inc. (GDDY US) Grid Dynamics Holdings Inc. (GDYN US) Monolithic Power Systems Inc. (MPWR US) OneSpan Inc. (OSPN US) Rimini Street Inc. (RMNI US) Riot Platforms Inc. (RIOT US) SPS Commerce Inc. (SPSC US) Twilio Inc. (TWLO US) Universal Display Corp. (OLED US) Western Digital Corp. (WDC US) --With assistance from Subrat Patnaik, Neil Campling and David Watkins. (Updates to afternoon trading.) Most Read from Bloomberg Businessweek ‘I Have Half of MAGA’: The Republican Challenging Trump From Within Running America’s Second-Busiest Airport in Turbulent Times It’s Boating Season, But Only If You Can Afford Fuel United’s CEO Is Here to Buy Your Struggling Airline Outrage Over Pesticides Is Alienating Some Trump Voters ©2026 Bloomberg L.P.

Image source: The Motley Fool. Thursday, April 30, 2026 at 9 a.m. ET President and Chief Executive Officer — Liron Eizenman Chief Financial Officer — Eran Gilad Investor Relations — Kenny Green Need a quote from a Motley Fool analyst? Email [email protected] Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Silicom First Quarter 2026 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 on the News section of the company's website, www.silicom-usa.com. I would now like to hand over the call to Mr. Kenny Green of EK Global Investor Relations. Mr. Green, would you like to begin, please? Kenny Green: 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, during this call, we may make forward-looking statements within the meaning of applicable securities laws. These statements may include, among other things, statements regarding the company's strategy, market opportunities, customer demand, product development initiatives, industry trends, expected deployments of the company's solutions, financial outlook, revenue expectations, margins, operating expenses, profitability and future growth opportunities. These statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements. These risks include, among others, those described in the company's press release issued today in its filings with the U.S. Securities and Exchange Commission, including its annual report, Form 20-F. The company undertakes no obligation to update any forward-looking statements. With us on the call today are Mr. Liron Eizenman, President and CEO; and Mr. Eran Gilad, CFO. Liron will begin with an overview of the results, followed by Eran will provide the analysis of the financials. We will then turn the call over to the question-and-answer session. And with that, I would now like hand the call over to Liron. Liron, please go ahead. Liron Eizenman: Thank you, Kenny, and good day, everyone. I'm exceptionally pleased to share a truly excellent set of quarterly results well ahead of our expectations. Over the next few minutes, I look forward to discussing why we are more excited than ever about Silicom's momentum and trajectory ahead. . The first quarter of 2026 has been an excellent one for Silicom. Our core business has now reached a clear inflection point with extraordinary momentum in financial performance well ahead of the expectations we shared with you only a few months ago. The highly successful implementation of our strategic plan is clear and our business is decisively outperforming on all fronts. Revenues this quarter came in at $19.1 million, representing a year-over-year growth of 33%, significantly ahead of our guidance range, which had originally expected an 18% year-over-year growth at the midpoint. This is the second quarter in a row of very strong improvement with both quarters well ahead of our original expectations. This quarter, even more so, we have seen a powerful upward inflection with the year-over-year growth accelerating significantly and essentially doubling from 17% last quarter to 33% now. Not only did we surpass our revenue expectations this quarter, but our momentum continues to accelerate, and looking ahead, we anticipate even greater achievement for the second quarter. We expect second quarter revenues to range from $20 million to $21 million representing accelerated 40% growth on a year-over-year basis at the upper end of the guidance. Given the strong improvement in visibility, we now have into the remainder of the year, we expect full year 2026 revenues to be in the range of $82 million to $83 million, representing an approximate 33% year-over-year growth. This exceptional performance is the direct result of the design wins achieved in previous years and the ongoing disciplined execution of our strategic plan. As those design wins ramp, we are seeing strongly expanding revenue contribution and materially improved visibility for the remainder of the year. We are seeing equally impressive traction on the design win front. As you recall, we set ourselves a target of between 7 and 9 design wins for 2026. We are only a third way through the year, and we have already achieved 4, halfway towards our target, which puts us on track to meet and partially exceed the upper end of this target. Design wins we achieved today will be the foundation for continued strong growth into 2027 and beyond. I want to spend a few minutes focusing on some of the recent design wins we have achieved since the start of the year. At the start of the year, the global networking and security-as-a-service leader expanded its deployment of Silicom Edge devices into multiple additional use cases, more than doubling our expected annual revenue from this customer, from around $4 million to between $8 million and $10 million, we found the incremental revenues already flowing through this quarter. This achievement highlights both the strength of our blue chip customer relationships and our strategy of growing by expanding existing engagements alongside winning new ones. In February, a Tier 1 cybersecurity customer a long-standing partner, selected one of our Edge systems as the platform for their next-generation high-end product lines. To date, we have received initial orders of over $1 million for 2026 and we expect this engagement to ramp to double that. We are in discussions for additional product lines at this customer. This design win is another great example of our long-term customer relationships generate additive revenue contributions across our product portfolio over time. In March, we announced the design win with one of the world's largest streaming service providers, which selected our high-speed networking adapter for deployment across its proprietary streaming infrastructure. We've already received an initial order for over $1 million with total purchases over 5 years expected at $12 million. In parallel, we are in active discussions with the customer about the customized special form factor network adapter for the same infrastructure. If this materializes, it would more than double our networking related revenues from this customer in the region of $25 million to $30 million. . In April, we announced a $3 million per year design win with a European leader in advanced encryption and secure communication solutions. After a successful evaluation, they selected an FPGA SmartNIC for deployment that includes post-quantum cryptography among its use cases, marking our third post-quantum cryptography design win to date and a key expansion of our PQC customer base. We have initial commitment of $1 million and beyond this, we are in active discussions about the next-generation higher-speed FPGA SmartNIC as well as a potential full system solution, combining a server with an FPGA SmartNIC opportunities that could meaningfully expand the partnership. Those 4 design wins demonstrate the breadth and the quality of our momentum across all our core product lines. Beyond the design wins already secured, our pipeline of opportunities is broader and deeper than it has ever been. It spans all our core product lines, Edge systems, SmartNIC and FPGA-based solutions and includes leading as well as fast-growing names across cybersecurity service providers, networking and other key verticals. We expect part of this pipeline to continue to convert into design wins over the coming quarters, providing the foundation for accelerated growth in 2027 and beyond. While the return to strong growth within our core business is the main story, we continue to invest in 3 venture style upside opportunities we spoke about last quarter. AI inference, post-quantum cyptography and white-label switching. I stress that we are not pursuing those opportunities to replace legacy core business, quite the opposite. Those growth opportunities are additive. It's precisely because our stable growing core business is performing so well that we have the platform, the relationships and the balance sheet strength to invest in those new growth engines. All of which leverage our IP and the same engineering talent that drive our core today. As I discussed last quarter, AI infrastructure investments are undergoing a fundamental shift from training models to querying the models at scale known as inference. This shift is being dramatically accelerated by the rise of agentic AI, where autonomous agents generate continuous high volume inference or growth on behalf of users rather than the occasional single query of traditional chatbot interactions. A single agent completing a test can trigger hundreds or thousands of inference calls and enterprises are deploying those agents across every function. The result is that the inference is rapidly overtaking training as the dominant driver of AI infrastructure spend, creating massive networking and interconnect bottlenecks at unprecedented scale and that's exactly the problem that Silicom excels in solving. We are making significant progress with 2 of the world's most promising contenders in the high-stakes race to architect the future of AI computing. Furthermore, we recently started in cooperation with the customer the development of a new inference specific product. We will share more data with those engagement progress. We view our rapid progress in expanding footprint in this high-growth sector as a potential game changer for Silicom. In summary, this is an exceptionally exciting and transformative time at Silicom. Our core business is accelerating at a remarkable pace, delivering 33% growth in the first quarter with the potential for even stronger growth in the second quarter, positioning us surely on track for a very strong full year performance. Our design win engine is firing on all cylinders with 4 already achieved out of our 7 to 9 targets for 2026, putting us well ahead of our plan and giving us increased confidence in our ability to meet and potentially exceed our targets. Our pipeline of core Edge systems, SmartNIC and FPGA solution is the strongest and most expansive we have ever seen. Combined with our robust balance sheet, this gives us exceptional flexibility to invest aggressively in both our core growth and our high potential venture style opportunities, all while maintaining a disciplined and conservative financial profile. . We are very excited about Silicom's strong and accelerating momentum in 2026 and are moving aggressively and with confidence to fully capture the opportunities ahead. We are highly optimistic about the significant value we are building and look forward to delivering strong and accelerating returns for our shareholders in the quarters ahead and over the long term. With that, I will now hand over the call to Eran for a detailed review of the quarterly results. Eran, please go ahead. Eran Gilad: Thank you, Liron, and good day to everyone. I will review the financial results and business performance for the first quarter of 2026. Before beginning the financial overview, I would like to remind you that unless otherwise indicated, all financial results are non-GAAP. A full reconciliation of our results on a GAAP to non-GAAP basis is available in the press release issued earlier today. Revenues for the first quarter of 2026 were $19.1 million, 33% above the $14.4 million reported in the first quarter of last year. The geographical revenue breakdown over the last 12 months was as follows: North America, 76%; Europe and Israel, 14%; Far East and rest of the world, 10%. During the last 12 months, we had won 10% plus customers, which accounted for about 10% of our revenues. Gross profit for the first quarter of 2026 was $5.7 million, representing a gross margin of 30% compared to a gross profit of $4.4 million or gross margin of 30.3% in the first quarter of 2025. Operating expenses in the first quarter of 2026 were $7.6 million compared with $6.7 million reported in the first quarter of 2025. Operating loss for the first quarter of 2026 was $1.9 million, an improvement from the operating loss of $2.4 million reported in the first quarter of 2025. The narrowing of the operating loss reflects the operating leverage we are beginning to see as our revenues return to strong growth and is a clear indication of the improving profitability profile we expect to deliver as our growth accelerates. We are very pleased with this positive trajectory, which has been tracking ahead of our expectations. Net loss for the quarter was $1.5 million compared to a net loss of $2.1 million in the first quarter of 2025. Loss per share in the quarter was $0.25. This is compared with a loss per share of $0.37 as reported in the first quarter of last year. Now, turning to the balance sheet. Our balance sheet remains very strong. As of March 31, 2026, our working capital and marketable securities amounted to and $109 million, including $63 million in high-quality inventory and $63 million in cash, cash equivalents and high-rated marketable securities with no debt. I would like to add a few words on the increase in inventory. We are intentionally building our inventory both to support our strong revenue trajectory and to safeguard our ability to ensure uninterrupted product delivery to our customers. This is a deliberate proactive step that we are taking and leveraging our balance sheet strength to do so, which effectively mitigates the impact of the current extending lead times for memory chips and positions us well to continue to capitalize on the growth opportunities ahead. That ends my summary. I would like to hand back to the operator for a question-and-answer session. Operator? Operator: [Operator Instructions] The first question is from Ryan Koontz of Needham & Company. Ryan Koontz: Really nice quarter. Congrats on the results and terrific outlook. I wanted to ask you a little more detail on how we should think about timing. I'm just trying to dumb this down a little bit for me, and folks maybe aren't that familiar with the story. But can you maybe break down like what's going well with the business here in the near term? And how these new design wins layer in? Is the improved momentum in the quarter, for example, is that due to your core business or are new design wins contributing yet? Can you just kind of give us a time view of what's going on here, would be really helpful. Liron Eizenman: So I think as we explained in the past, design wins usually take time until they materialize. So what we're seeing right now is not the design wins that we announced this quarter and maybe not even a design win that we announced, I don't know, 2 or 3 quarters, but it takes time until things materialize, until we see full ramp-up, and so some of the additive revenue that we're seeing right now is actually coming from design wins that we've done maybe even in '24 or '25, early '25, and it's building up. It's more and more momentum, more customers actually ramping up fully and some of them even better than what we anticipated. And this is what's leading us to the situation that we're now seeing this very nice increase. Ryan Koontz: And maybe in terms of the core business in the quarter, it sounds like there was some upside. Can you attribute that to different market verticals, maybe in both the print and the second quarter outlook. What's happening with the kind of current base of business that's driving the acceleration? Liron Eizenman: So it's maybe the core business. So everything, all the new stuff we're talking about, there's no significant revenue coming from that, so everything we're seeing, this is the core business. So we will see significant improvements or significant advantages, I would say, with the new stuff that the 3 pillars that we talked about, this will be on top of everything that we're seeing right now. But as for the core itself, it's across everything. It's across our SG&A. We see strong momentum there. We see it also with our Edge devices. We see it with our SmartNIC. It's across regions. It's just we see very strong momentum everywhere. Ryan Koontz: So it's not -- there's not one particular customer driving that. And maybe shifting to more of a forward-looking view on the -- both the encryption side as well as AI. Can you maybe go into some explanation of what your competitive advantage is here that allow you to get some of these new wins around AI in price and encryption? Liron Eizenman: Yes. So I'll start with encryption. So we've been building encryption products for years. This is not a new area for us. It's just that the post-quantum encryption is something relatively new to the world, not for us, those algorithms are just coming out in the last 12, 18 months, and since we are already a leader in encryption, we know who are the customers, it's our existing customers. We know the type of additional customers we can onboard. We know how to sell to those guys, we know the technology they need, so it was kind of a straightforward next step for us [indiscernible] something we needed to invest in order to be ready with the right product at the right time in order to be there. So this is for encryption. For AI, the problem that we are solving is basically a networking -- I would say, 2 problems we're starting. One problem is a networking problem. And this is what we've been doing for many, many years. So basically taking the same IP, the same R&D talent that we have and just building the right products for that or repurposing existing products to solve those problems. . And the other one is basically being the inference engine itself, what we call the auto monopoly basically instead of building an ASIC now for 3 years, the pace of improvement in running models is so quickly, we see advantages and new stuff coming every week, so if you freeze yourself now to an ASIC, you're basically losing everything new that will come in the next 3 years. If you're doing it on an FPGA that you can update in the field, you can actually, every week come with new things that will pop up, new strategies and new ways to do stuff, and we'll just accelerate what you did a week ago. Now we can do it 10%, 20%, 50% quicker. So this is why we think the auto monopoly is another key element. Ryan Koontz: So the faster innovation of FPGAs just gives you a big advantage. Back on the networking comment you made around AI, I assume that's delivered in the form of NICs typically on the AI infrastructure networking. Liron Eizenman: It's part of it, but I would say it's not necessarily simple NICs, it's our SmartNICs and some of them are -- would be new SmartNICs to develop. Some of them are existing SmartNICs. I would say most of them, yes, in the form of SmartNICs. Ryan Koontz: And then lastly, you touched on memory and inventory. It's obviously becoming a big concern industry-wide. It's been building, and we've been hearing lately about a lot of inventory builds and long-term purchase commitments from a number of networking peers of yours this quarter. Can you maybe give us a little more detail on your supply agreements and how you're thinking about the risks of memory supply and memory costs and how you pass those costs on to customers? Liron Eizenman: Yes. I mean it's -- as you noted, inventory is going up, there's no other way to work around it. If you want to be ready to supply products, especially when we are a company that is growing dramatically, there's no other way, you have to secure the inventory, you have to work very, very closely with the DRAM vendors and with the storage vendors, and that's what we're doing. We're qualifying additional sources all the time, trying to balance between the different vendors because not all of them are able to deliver everything that we need. I mean they are saying it publicly that they cannot deliver all the demand that their customers have, so we have to balance between different vendors. So a lot of work, a lot of work here, and yes, it's a challenge with the supplies, a challenge for the customers but we're navigating it very, very closely with the customers, explaining the situation to them for months now. This is not something new. Everyone understands the situation. We're trying to solve a situation, sometimes even in creative ways like changing specs of the product or exploring with the customer exactly what would make them happy and allow them to keep selling the product in the best way for them, and it's definitely something that takes effort from us, but we think it's going to be something that will allow us to build a relationship for many, many more years with those customers. Ryan Koontz: And you're able to pass those increased costs of memory on your customers as part of your contracts with your customers? Liron Eizenman: Most of it, yes. Ryan Koontz: Most of it, okay. But you're not anticipating major gross margin hit in the -- or at least like in the coming quarters? Liron Eizenman: No, absolutely not. Operator: [Operator Instructions] Next question is from Greg Weaver of the Invicta Capital. Gregory Weaver: Just a couple of quick ones on the inference side of things. What's your best guess in terms of revenue timing there? You mentioned the ramp that you're seeing in fiscal '26 isn't these new products? Liron Eizenman: Yes. I think probably more 2027, rather than 2026 in terms of significant revenue for inference. But we may see some this year definitely making some good progress, as I've said before. We -- hopefully, we can share more in future, but as we meet more milestones, but I'd say significant probably in 2027. Gregory Weaver: And you stated you were creating a new inference specific product with a key customer. Now is that 1 of the 2 guys you've referenced? Or is this a new player? Liron Eizenman: Yes. It's 1 of those 2 guys. Operator: 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 a concluding statement? Liron Eizenman: Thank you, operator. Thank you, everybody, for joining the call and your interest in Silicom. We look forward to hosting you on our next call in 3 months. Good day. Operator: Thank you. This concludes Silicom's First Quarter 2026 Results Conference Call. Thank you for your participation. You may go ahead and disconnect. Before you buy stock in Silicom, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Silicom wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Silicom (SILC) Q1 2026 Earnings Transcript was originally published by The Motley Fool

Financial beat and raised guidance: Silicom reported Q1 revenue of $19.1 million (+33% YoY), said results were well ahead of expectations, raised FY2026 revenue guidance to $82–$83 million (≈33% growth), and showed improving profitability with an operating loss narrowing to $1.9M and net loss of $1.5M. Design-win driven ramp across core products: Management has secured four design wins so far (targeting 7–9) across Edge, SmartNIC and FPGA lines — notable wins include an expansion doubling expected revenue to ~$8–10M, a tier‑1 cybersecurity order initially >$1M expected to double, a streaming‑infrastructure win with >$1M now and ~$12M over five years (potentially $25–30M if customized), and a European PQC FPGA SmartNIC win around $3M per year. Strong balance sheet and inventory strategy; AI timing: Silicom has no debt, roughly $63M in cash/marketable securities and is intentionally building about $63M of inventory to secure supply, while management expects meaningful AI inference revenue to be “more 2027 rather than 2026.” Interested in Silicom Ltd? Here are five stocks we like better. Silicom (NASDAQ:SILC) reported first-quarter 2026 results that management said came in “well ahead” of expectations, driven by what it described as a broad-based acceleration in its core business and the ramp of prior design wins. President and CEO Liron Eizenman said the company delivered “a truly excellent set of quarterly results,” describing Q1 2026 as an “inflection point” for the business. Revenue totaled $19.1 million, up 33% year over year, which Eizenman said was “significantly ahead” of the company’s prior guidance range. → Corning Beats Q1 Estimates but Drops 9% on Guidance Miss Looking ahead, Eizenman guided to Q2 revenue of $20 million to $21 million, and said Silicom now expects full-year 2026 revenue of $82 million to $83 million, which he characterized as approximately 33% year-over-year growth. Eizenman attributed the performance to “design wins achieved in previous years” that are now ramping, adding that the company has “materially improved visibility for the remainder of the year.” → Is Oracle Undervalued as Cloud Growth Accelerates? Eizenman said Silicom targeted seven to nine design wins in 2026 and has already achieved four, putting the company “on track to meet and possibly exceed” its goal. He detailed several recent wins and expansions: Expansion with a global networking and security-as-a-service leader: Eizenman said the customer expanded deployments of Silicom Edge devices into “multiple additional use cases,” more than doubling expected annual revenue from about $4 million to $8 million to $10 million, with some incremental revenue already contributing in Q1. Tier 1 cybersecurity customer design win: A long-standing customer selected one of Silicom’s Edge systems as a platform for “next generation high-end product lines.” Eizenman said Silicom has received initial orders of over $1 million for 2026 and expects the engagement to ramp to “double that,” with discussions underway for additional product lines. High-speed networking adapter win for streaming infrastructure: Eizenman said a customer selected Silicom’s high-speed networking adapter for deployment across a proprietary streaming infrastructure, with an initial order of over $1 million and expected total purchases over five years of $12 million. He added Silicom is also in discussions about a customized special form factor network adapter that, if it materializes, “would more than double” networking-related revenues from that customer to roughly $25 million to $30 million. European encryption and secure communications win: In April, Silicom announced what Eizenman described as a $3 million per year design win with a European leader in advanced encryption and secure communications. The customer selected an FPGA SmartNIC for a deployment including Post-Quantum Cryptography (PQC). Eizenman said this marked Silicom’s third PQC design win to date and included initial commitments of $1 million, with further discussions underway regarding a higher-speed next-generation FPGA SmartNIC and a potential full system solution combining a server with an FPGA SmartNIC. Eizenman said the company’s opportunity pipeline is “broader and deeper than it has ever been,” spanning Edge systems, SmartNICs, and FPGA-based solutions across cybersecurity, service providers, networking, and other verticals. → The $880M Bet to Survive Real Estate's Reset Chief Financial Officer Eran Gilad reviewed results on a non-GAAP basis, noting revenue of $19.1 million compared with $14.4 million in the year-ago quarter. By geography, Gilad said revenue mix was North America 76%, Europe and Israel 14%, and Far East and rest of world 10%. Over the last 12 months, Silicom had one customer accounting for about 10% of revenue, he said. Gross profit was $5.7 million, representing a 30% gross margin, compared with $4.4 million and a 30.3% gross margin in Q1 2025. Operating expenses were $7.6 million, up from $6.7 million a year ago. Operating loss improved to $1.9 million from an operating loss of $2.4 million in Q1 2025. Gilad said the narrowing loss reflects “the operating leverage we are beginning to see as our revenues return to strong growth” and said the trend was “tracking ahead of our expectations.” Net loss was $1.5 million, or $0.25 per share, compared with a net loss of $2.1 million, or $0.37 per share, in the year-ago quarter. On the balance sheet, Gilad said Silicom ended March 31, 2026 with what he described as a very strong position and no debt. He reported working capital and marketable securities of $109 million, including $63 million in inventory and $63 million in cash equivalents and high-rated marketable securities. Gilad said the company is “intentionally building” inventory to support its revenue trajectory and ensure uninterrupted delivery amid “extending lead times for memory chips.” In the Q&A, Eizenman added that rising inventory is necessary to secure supply as the company grows, and said Silicom is working closely with DRAM and storage vendors while also “qualifying additional sources” and balancing between suppliers. When asked about the ability to pass higher memory costs to customers, Eizenman said, “Most of it, yes,” and added that he was “absolutely not” anticipating a major gross margin hit in the coming quarters due to memory costs. Eizenman also clarified that the strong Q1 performance is currently coming from Silicom’s core business rather than newer initiatives. Responding to questions about timing, he said current momentum reflects design wins from earlier periods—“maybe even in 2024 or 2025”—that are now ramping. Regarding newer growth areas, Eizenman reiterated Silicom is investing in three “venture-style” upside opportunities: AI inference, Post-Quantum Cryptography, and white label switching, emphasizing they are intended to be additive rather than a replacement for the core business. He said Silicom is making progress with “two of the world’s most promising contenders” in AI computing and has started development of an inference-specific product with one of those two customers. Asked about AI inference revenue timing, Eizenman said significant revenue is “more 2027 rather than 2026,” though he said the company “may see some” this year. Silicom Ltd. is an Israel‐based provider of advanced networking infrastructure products designed to enhance data throughput, security, and functionality in enterprise, cloud, telecommunications, and edge‐computing environments. The company develops and manufactures a range of network interface cards (NICs), specialized adapters, and turnkey network appliances that support high‐performance packet processing, encryption, compression, and traffic optimization. Silicom's solutions are engineered to offload complex network functions from central processing units, enabling customers to achieve greater efficiency, reliability, and scalability in their data centers. Founded in 1987 and headquartered in Lod, Israel, Silicom has grown from a niche hardware developer into a global supplier of connectivity and networking solutions. The article "Silicom Q1 Earnings Call Highlights" was originally published by MarketBeat.

Management attributes the 33% revenue growth to a clear inflection point where design wins from 2024 and early 2025 are now reaching full production ramp-up. The company is outperforming original expectations due to broad-based momentum across all core product lines, including Edge systems, SmartNICs, and FPGA solutions. Visibility has materially improved as blue-chip customers expand existing deployments into multiple additional use cases, effectively doubling annual revenue from certain key accounts. Strategic positioning is focused on leveraging a stable, growing core business to fund 'venture-style' upside opportunities in AI inference, post-quantum cryptography, and white-label switching. Management notes that the shift from AI training to inference is creating massive networking bottlenecks that align with Silicom's core engineering expertise in high-speed interconnects. The company is intentionally leveraging its strong balance sheet to build inventory, mitigating risks associated with extending lead times for memory chips and ensuring uninterrupted delivery. Full-year 2026 revenue guidance of $82 million to $83 million assumes continued acceleration of design win ramps and approximately 33% year-over-year growth. Management expects to meet or exceed the upper end of its 2026 target of 7 to 9 design wins, having already secured 4 in the first four months of the year. Significant revenue contributions from the new AI inference and post-quantum cryptography initiatives are primarily expected to materialize in 2027 rather than 2026. The company is co-developing a new inference-specific product with a key customer, utilizing FPGA technology to allow for field updates as AI models evolve rapidly. Second quarter 2026 guidance assumes a revenue range of $20 million to $21 million, representing an accelerated 40% growth rate at the upper end. Inventory levels increased to $63 million as a proactive measure to safeguard against global supply chain constraints and rising demand. Management flagged extending lead times for memory chips as a persistent challenge, requiring close coordination and balancing between multiple DRAM and storage vendors. The company is qualifying additional memory sources and occasionally adjusting product specifications to maintain DRAM and storage supply continuity for customers. Operating leverage is beginning to manifest as revenue growth outpaces expense increases, leading to a narrowing of operating losses compared to the prior year. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management clarified that current growth is entirely driven by the core business and design wins from previous years, not the new 'venture' initiatives. New design wins typically take several quarters to reach full ramp-up, meaning recent wins will provide the foundation for 2027 growth. Silicom's advantage in AI stems from using FPGAs which can be updated weekly to match the pace of AI innovation, unlike fixed ASICs which take years to develop. In encryption, the company is leveraging long-standing relationships and existing IP to capture the emerging post-quantum cryptography market. Management stated they are able to pass most increased memory costs on to customers through existing contracts. They do not anticipate a major hit to gross margins in the coming quarters despite the challenging supply environment. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

- Core business at inflection point: 33% YoY growth for Q1, ~40% YoY growth projected for Q2 2026 - KFAR SAVA, Israel, April 30, 2026 /PRNewswire/ -- Silicom Ltd. (NASDAQ: SILC), a leading provider of high-performance networking and data infrastructure solutions, today reported its financial results for the first quarter ended March 31, 2026. Financial Results Silicom's revenues for the first quarter of 2026 were $19.1 million, a 33% increase compared with $14.4 million for the first quarter of 2025. On a GAAP basis, the company's net loss for the quarter totalled $2.4 million, or $0.41 per ordinary share (basic and diluted), compared with $2.8 million, or $0.49 per ordinary share (basic and diluted), recorded in the first quarter of 2025. On a non-GAAP basis (as described and reconciled below), net loss for the quarter totalled $1.5 million, or $0.25 per ordinary share (basic and diluted), a 31% reduction compared with $2.1 million, or $0.37 per ordinary share (basic and diluted), for the first quarter of 2025. Guidance We are excited to report that not only did we surpass our revenue expectations this quarter, but that our momentum continues to accelerate, and that we anticipate even greater achievements for the second quarter. We expect second quarter revenues to range from $20 to $21 million, representing accelerated 40% growth on a year-over-year basis at the upper end of the guidance. Comments of Management Liron Eizenman, Silicom's President and CEO, commented, "The first quarter was exceptionally strong in both sales and pipeline development, confirming the beyond-projection performance of our strategic plan and execution. After achieving 33% revenue growth on a year-over-year basis for the first quarter, and given the increased visibility provided by resilient demand for our core business products, we expect to deliver even stronger performance in the future, including sales that reach $82-$83 million in 2026 and continue building throughout 2027. While we were pleased to close eight Design Wins in 2025, during the past four months we have already closed four new Design Wins, and continue working through a broad and deep pipeline for our core Edge, Smart NIC and FPGA offerings. We are thus well positioned to meet or exceed our target of 7-9 design wins for 2026. "In fact, these four recent design wins are a concrete demonstration of the strength and momentum of our core business. The expansion of our global networking and security-as-a-service customer to an $8-to-10 million annual run-rate, the Tier-1 cyber security leader's selection of a higher-end Edge system for its next-generation product line, and our streaming infrastructure win with a path to $25-to-30 million in revenues over five years, collectively demonstrate the upsell power of our long-term relationships and the additive, non-cannibalizing nature of our portfolio. In parallel, our recent FPGA Smart NIC design win with a European secure communications leader, which will scale toward $3 million per year and marks our third Post-Quantum Cryptography design win to date, further expands our PQC customer base. Together, these wins confirm that our core business is not only thriving, but also growing faster than originally projected." Mr. Eizenman continued, "While our core business accelerates through this key inflection point, we are also building deep momentum with two of the world's most promising contenders in the high-stakes race to architect the future infrastructure of AI inference. Reinforcing our position as a forward-thinking solutions provider in this space, we recently commenced the co-development of a specialized AI inference solution in cooperation with a major customer. Our pursuit of this upside is made possible by our unique platform of core assets, including our deep technological expertise and proprietary IP roots, our rapid, reliable customization and support capabilities, and our extensive and growing Tier-1 customer base." Mr. Eizenman concluded, "As we move forward through 2026, we are ideally positioned to benefit from a stronger-than-ever pipeline and from the extraordinary momentum of our target markets, both for our core products and for our AI inference infrastructure offerings. We are excited about the opportunities that lie ahead, and moving aggressively to actualize our full growth potential. We look forward to reporting the significant value that this will create for our shareholders, both in the quarters ahead and over the long term." Conference Call Details Silicom's Management will host an interactive conference today, April 30th, at 9am Eastern Time (6am Pacific Time, 4pm Israel Time) to review and discuss the results. To participate, investors may either listen via a webcast link hosted on Silicom's website or via the dial-in. The link is under the investor relations' webcast section of Silicom's website at https://www.silicom-usa.com/webcasts/ For those that wish to dial in via telephone, one of the following teleconferencing numbers may be used: US: 1 866 860 9642 ISRAEL: 03 918 0609 INTERNATIONAL: +972 3 918 0609 At: 9:00am Eastern Time, 6:00am Pacific Time, 4:00pm Israel Time It is advised to connect to the conference call a few minutes before the start. For those unable to listen to the live call, a replay of the call will be available for three months from the day after the call under the above-mentioned webcast section of Silicom's website. About Silicom Silicom Ltd. is an industry-leading provider of high-performance networking and data infrastructure solutions. Designed to optimize performance and efficiency in Cloud, Data Center and Edge environments, Silicom's solutions increase throughput and minimize latency, serving as the infrastructure backbone for today's most critical technologies. Our innovations empower high-demand workloads across Artificial Intelligence (AI) inference, SD-WAN, SASE, cyber security, fabric switching, NFV, and more. Our comprehensive portfolio, including high-speed server adapters, advanced hardware offloading and acceleration engines, AI NICs, FPGA-based smart cards, Post Quantum Cryptography (PQC) hardware accelerators, white label switches and Edge CPEs, is used by Tier-1 customers throughout the world, including cloud players, service providers and OEMs, to enable their networks to scale efficiently. With engineering excellence, a strong financial position and a legacy of over 400 active Design Wins, Silicom serves as the "go-to" connectivity and performance partner for technology leaders around the globe, and drives the next generation of infrastructure. For more information, please visit: www.silicom.co.il Statements in this press release which are not historical data are forward-looking statements within the meaning of applicable securities laws which involve known and unknown risks, uncertainties, or other factors not under the company's control, which may cause actual results, performance, or achievements of the company to be materially different from the results, performance, or other expectations implied by these forward-looking statements. For example, when the Company discusses its revenue outlook or guidance for future periods, growth opportunities, market demand for its products and solutions, expected customer deployments, the scalability of its business model, operating performance, strategic partnerships, technology leadership, or industry trends affecting cloud infrastructure, artificial intelligence workloads, networking acceleration technologies or telecommunications markets, it is using forward-looking statements. Additional factors include, but are not limited to, Silicom's dependence for substantial revenue growth on a limited number of customers, industry trends affecting networking and data center infrastructure, including the migration to cloud architectures, disaggregation of networking systems and the separation of hardware and software solutions; the pace of adoption of emerging technologies such as artificial intelligence inference infrastructure; the timing and extent of market adoption of Silicom's new products and of new Design Wins achieved by Silicom; fluctuations in customer purchasing cycles and the timing of customer deployments; protection of intellectual property, changes in exchange rates; and the wars in Gaza, Lebanon and with Iran, as well as the war in the Ukraine, and existing and potential disruptions to global shipping routes such as the Straits of Hormuz and the Red Sea. Further information about the company's businesses, including information about factors that could materially affect Silicom's results of operations and financial condition, are discussed in our Annual Report on Form 20-F and other documents filed by Silicom and that may be subsequently filed by the company from time to time with the SEC. These forward-looking statements can generally be identified as such because the context of the statement will include words such as "expect," "should," "believe," "anticipate" or words of similar import. Similarly, statements that describe future plans, objectives or goals are also forward-looking statements. In light of significant risks and uncertainties inherent in forward-looking statements, the inclusion of such statements should not be regarded as a representation by Silicom that it will achieve such forward-looking statements. The company disclaims any duty to update such statements, whether as a result of new information, future events, or otherwise. Non-GAAP Financial Measures This release, including the financial tables below, presents other financial information that may be considered "non-GAAP financial measures" under Regulation G and related reporting requirements promulgated by the Securities and Exchange Commission (the "SEC") as they apply to our company. These non-GAAP financial measures exclude compensation expenses in respect of options and RSUs granted to directors, officers and employees, as well as lease liabilities - financial expenses (income). Non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, GAAP financial measures. The tables also present the GAAP financial measures, which are most comparable to the non-GAAP financial measures as well as reconciliation between the non-GAAP financial measures and the most comparable GAAP financial measures. The non-GAAP financial information presented herein should not be considered in isolation from or as a substitute for operating income (loss), net income (loss) or per share data prepared in accordance with GAAP. Company Contact: Eran Gilad, CFO Silicom Ltd. Tel: +972-9-764-4555 E-mail: [email protected] Investor Relations Contact: Ehud Helft EK Global Investor Relations Tel: +1 212 378 8040 E-mail: [email protected] -- FINANCIAL TABLES FOLLOW – Logo: https://mma.prnewswire.com/media/733229/Silicom_Ltd_Logo.jpg View original content:https://www.prnewswire.com/news-releases/silicom-reports-q1-2026-results-302758689.html