Rogers Corporation (ROG) Earnings Call Transcript & Summary

Well, good morning, and welcome to Rogers Corporation 2026 Analyst and Investor Day. My name is Steve Haymore, I'm the Head of Investor Relations at Rogers. It's my pleasure to welcome all of you with us here today. It's wonderful to see so many familiar faces with us here at the New York Stock Exchange. And we're equally delighted to have many more joining us via the public webcast. Before we begin, there's a few items to quickly make you aware of. The first is that all the presentation materials for today's event will be posted over the course of this morning and you can access that through our Investor Relations website. There is a link to a dedicated page well, you'll find those presentations. In addition, the information this morning will include some forward-looking statements. We invite you to review more about this and review the statement, which is available on our website. The materials today will also include some non-GAAP financial measures. You can find the reconciliations to all those in the appendix of the materials again on our website. During the course of the morning, we'll have the opportunity to hear from the Rogers leadership team about the vision, the strategy and the exciting growth opportunities that we have ahead. At the conclusion of those presentations, we'll have a brief break following that break, we'll then have a live Q&A session. At the conclusion of the Q&A session, Ali will have a few closing remarks. And then for all those here, we invite you to come and see the product displays in the back of the room. I know we're excited to get started. So with that, let me turn it over to Ali.

Good morning, everyone. We are excited and honored to share with you our future -- our future vision or our vision for the future and our detailed strategy to achieve it. Rogers has a strong foundation and all the ingredients to successfully deliver. Rogers has a talent, technology platforms, loyal customers and global reach only to become a great company. Our entire team is committed to delivering on this next phase of growth. We know Rogers has not consistently delivered against its potential. But today, we will show you what has changed and the milestones to measure our progress. Our strategy and outlook reflect a conviction in what Rogers can achieve and is supported by active customer projects and tangible market opportunities. There are 4 themes that we will focus on in our presentations today. First, we are making progress toward making -- towards becoming a leaner, faster and higher growth company. Second, you will hear about the significant potential we see in our core markets and in fast-growing adjacencies such as data centers. Third, our growth plans are built on product technologies, manufacturing capabilities and supply chain that are proven in the market and trusted by our customers. Lastly, with our improved cost structure and growth outlook, there is a significant margin earnings upside embedded in the business. Our plan is to grow larger sales to over $1.5 billion by 2030. Our focus today will be on how we can achieve this organic growth and unlock Rogers potential. Our confidence in achieving this target is supported by several key pillars. First, we are extending established technologies and manufacturing platforms into adjacent growth markets. Second, the differentiated performance of our solution has been validated through customer testing. Third, the expected size of those opportunities are based on active customer engagements. In other words, this isn't a market share estimate. These are actual programs with customers. We'll share more details about the growth plans in a few moments. For those of you who are new to the story, let's go and tell you who is Rogers. We may not be a household name, but we are in a lot of the products we use every day. We are in your cell phone, we are on airplanes, trains and even cars that you may have used to come here today. We have been around for more than 190 years a long time. With over 3,000 associates serving more than 2,800 customers in more than 60 countries. We serve global leaders in many industries with a diverse mix of products and services. Our global technical and manufacturing capabilities are well positioned to refine and secure supply chain for our customers. Our business is well diversified. With 36% of our revenue from industrial, 26% from automotive, followed by consumer electronics, aerospace and defense at 16% each. We operate through 2 segments: the Advanced Electronic Solutions and the Elastomeric Material Solutions. There are 3 business units under each segment led by talented professionals. The AES segment is focusing on -- focused on solving customer issues in radio frequencies, connectivity, power and thermal management. The EMS segment is made up of a comprehensive portfolio of high-performance elastomers, which protect critical systems and improve reliability, even providing customers with comfort and convenience. In AES, Rogers laminate materials enable improved radar performance in driver assistance systems such as blind spot detections. In EV, our power substrates improve vehicle range with more efficient power conversion. In EMS, Rogers improve the durability of your smartphones with polyurethane materials that provide impact, protection and environmental ceiling. Our silicons also make air travel more comfortable with sound daring materials. Both Nate and Brian will go into a lot more details about this. Throughout our presentation today, you'll hear about why customers choose Rogers? We have a long and proven history. Many of our major customers have used our products for decades. First, why? First, because we've been around for a long time, we have a strong reputation and a brand recognition. We have decades of experience and serve our customers with high-performing products. We also have a broad product portfolio and international footprint. We have a global scale combined with our regional experts that provide local support. So in other words, we speak the customer's language. Second, our customers turn to us -- our customers turn to us for our application and development experience. Rogers engineers add as trusted partners to provide the necessary technical and development capabilities to optimize solutions for our OEM -- for our global OEMs and end users. They know that Rogers can deliver and always delivers with the performance and reliability needed. I was talking to one of our large partners in Europe, who told me that thousands of these customers actually ask for products -- for our products and brands by name, and they would not accept alternatives. This is an impressive statement and showing the strength of the brand in the global market. It's not just the U.S. In simple terms, we help solve complex challenges with engineered materials and products. In other words, the more challenging the problem, the greater need for Rogers solutions. For decades, Rogers has helped customers solve design challenges created by each new wave -- by each wave of new wave of technology. When customers need data to travel further across a circuit board without losing quality or detect a faint radio signal, they turn to Rogers. Whether in space, defense, wireless communication or automotive radars, we have been their trusted partners with the optimal solutions. When they are dealing with power and thermal management challenges in high-power chips, renewable energy or EVs, they turn to Rogers. If they need solutions to ensure reliability of smartphones or if they need to improve the life of the EV battery, they turn to Rogers. Underpinning the value we provide to our customers is the mission-critical reliability provided by our materials and products. So our global footprint gives customers supply resilience, regional production and local technical capabilities that matter more as supply chain regionalize. We have manufacturing operations in North America, Europe and Asia, and the ability to produce many of our products in multiple regions, minimizing supply chain risks to our customers. We are also well positioned to benefit from the continuing supply localization trends. Our market strategy is built on the deep connections we have with our customers. Our engagement with customers provide an understanding of their specific challenges at every stage in the value chain. That allows us to address and help them address their needs. If our existing portfolio does not meet their needs or expectations, we then customize our offering to their specific and unique criteria. Through this process, we are able to secure design wins that translate into durable revenue streams. These relationships also create opportunities to cross-sell more of our Rogers portfolio compounding growth over time. We are continuing to strengthen this model in 3 ways. First, we are expanding cross-selling by aligning capabilities around key industry verticals and increasing collaboration across product lines. Second, we are strengthening and building on existing relationship with our channel partners, such as converters and fabricators. Third, we are deepening customer engagement and expanding direct relationships with OEMs in targeted markets. Across each of these improvement areas, our focus is on developing a closer customer connection that will anticipate their needs and translate this into the products and solutions that they will need and enable them to succeed. Rogers operates in dynamic markets where speed of execution and time to market are critical. In recent years, we did not consistently move at the pace these markets require. To succeed going forward, we are operating with greater focus, making faster decisions, shortening development cycles and responding more quickly to customer needs. We are already seeing evidence of this change in the marketplace, a lead customer has specifically recognized the pace at which we are sampling, testing and delivering prototypes. One indication that our execution model is improving. The quick turnaround of samples to optimize their system performance was recognized by the same customer as a differentiated value. Examples like this have been enabled by our more simplified operating model and improved accountability structure. Our teams are empowered to make faster decisions and immediately address customer needs. We are not yet where we want to be. But the changes we are making at Rogers, the changes we are making are moving Rogers in the right direction. And it's showing up in our financial results. Sales are expected this year to end at $870 million compared to $811 million in 2025. EBITDA margins to grow by about 300 basis points and adjusted earnings per share to $3.80 from $2.39 in '25. This is an important first step towards our long-term targets and evidence that our operating improvements are beginning to translate into a measurable result. Our growth plans begin with a strong alignment between our core technologies and the secular trends reshaping markets. Across connectivity, thermal management, power electronics and pressure management. Customers are facing increasingly complex design challenges, areas that align directly with Rogers established and proven capabilities. In Aerospace and Defense, record OEM backlogs are driving demand for higher performance interconnect and elastomeric materials. In industrial markets, supply localization and factory automation are increasing the need for sealing and vibration management solutions in demanding operating environments. In automotive, electrification and higher level of vehicle safety are creating opportunity across battery systems, power conversion and high-performance radar and in data centers, rapidly increasing computing power is creating new requirements for higher speed connectivity and more efficient thermal management. Across these markets, our established technology platforms are aligned with demand drivers that support steady core market growth through 2030. Together, these market drivers support our expectations that Rogers can grow its core business, its core market annually at 5% anyway through 2030. Aerospace and Defense is expected to lead the portfolio, advancing at a high single-digit rate followed by automotive and industrial market at mid-single digit. Electronics and communications are expected to grow in the low single-digit range as gains in premium smartphones and other consumer electronics is partially offset by lower demand or flat demand in wireless infrastructure over the plan period. Across the portfolio, our differentiated technology, deeper customer engagement and improved go-to-market give us conviction that we can achieve the blended growth rates of 5%. Now let's turn to the exciting chapter here. Building on the core market foundation, we are also focused on 3 targeted adjacencies that can meaningfully accelerate Rogers long-term trajectory. Those are data centers, battery systems and EMI shielding. The common thread across these 3 opportunities is similar. Customers are facing more complex -- more complex performance challenges and Rogers can build from existing product platforms, applications know-how and customers' relationships to provide effective solutions. The largest of these adjacencies is data center where rising AI workloads are creating signal loss and thermal management challenges. EV and energy storage customers face increasingly stringent requirements for thermal management or thermal runaway protection and pressure management. In EMI shielding an increasingly complex electronics require greater protection from electromagnetic interference. Across each of these areas, we are building from existing capabilities into markets with attractive long-term potential. I'll start with data centers where Rogers has potential content across the entire facility with the most meaningful opportunity inside the server rack. And high-speed digital, increasing data rates are making insertion loss and signal integrity more demanding, particularly at M9 and beyond. This is a natural extension of Rogers long-standing expertise in PTFE based materials. And our customers are currently being -- our products are currently being tested by major industry leaders. We have active engagements with a handful of customers and design awards are expected to generate revenue starting in the second half of 2027. Advanced cooling is the second major area as AI chips consume more power and generate more heat, customers need solutions that can remove the heat more efficiently at the source. We are adapting our cooling technology already used in demanding high-power applications for the next-generation data center architectures. Multiple customers -- we are engaged with multiple customers, and they are in prototyping and testing activities. All the feedback we have is encouraging on the performance of the product. Importantly, these technologies are not new to Rogers. They are proven platforms we have manufactured for years and now being applied to one of the fastest-growing end markets. Within automotive, battery systems are the most compelling growth platform for Rogers. The automakers pushed for longer range, faster charging and higher energy density batteries safety become even more critical. Rogers serve these markets and these applications today. And we are developing differentiated solutions that address both thermal runaway protection and pressure management to increasingly important needs in advanced battery designs. This build on established automotive partnership and proven material expertise. Our automotive opportunity extends well beyond battery systems. Power subsidies provide meaningful content in BEV and PHEV, inverters and converters, while high-frequency circuit materials enable radar applications, our broad Elastomeric portfolio also supports ceiling, noise and vibration management applications throughout the vehicle. Together, these technologies give Rogers diversified content across the major drivers of vehicle electrification and safety. Bringing this together, our core markets and targeted adjacencies create a clear bridge to our 2030 target. Beyond the core growth of 5%, we expect data centers, battery systems and EMI shielding to generate over $450 million of annual revenue by 2030. These high-growth opportunities are consistent with our strategy and existing capability, giving us the confidence in our ability to execute. The foundation of our confidence is simple. We are leveraging our technologies, manufacturing capabilities and supply chain, which are proven today in the market and trusted by our customers. Our revenue expansion and continuous operational improvements are expected to drive significant margin and earnings expansion. By 2030, we are targeting 13% annual revenue growth, 26% adjusted EBITDA and $14 of adjusted EPS. In other words, we were roughly double the revenue in the next 40 years. And our EPS will increase by approximately sixfold. This represents a significant step change in Rogers earnings power, including approximately 40% annual adjusted EPS improvements, along with a stronger free cash flow and return on invested capital. M&A could and would provide incremental upside beyond these organic targets, but we didn't include any M&A impact in our targets. Again, this is based on organic growth. We have the confidence in these targets because of the strength of our team, the differentiated solutions we are bringing to market and the progress already underway. Rogers has the foundation, capabilities and opportunities to deliver this transformation, and I'm excited about what lies ahead. Nate now will show you how Advanced Electronic Solutions will convert these opportunities into growth.

Thanks, Ali. As you heard Roger set the clear faster growth by building our technology and these customer relationships. I'll now take a closer look at Advanced Electronic Solutions or AES, and show how our connectivity, thermal management and power electronics capabilities position us to grow in our core markets and capture meaningful adjacent opportunities, most notably in AI data centers. Before we dive in, let me introduce myself. I'm Nate Brese, Senior Director of Marketing and our AES segment, I joined Rogers 2 years ago, but after 3 decades in electronic materials, ranging from circuit board to semiconductor, electronic packaging, optics and display. That experience gives me a deep appreciation for the challenges that our customers face and Rogers capabilities that are increasingly valuable as electronics become faster, more complex and more powerful. Now let's jump into today's presentation. There are 3 main messages I'd like you to take away today. First, AES has a very long history of providing high-quality solutions and innovation in connectivity, thermal management and power electronics. Second, our trusted customer relationships are built on deep materials expertise, applications and even systems-level expertise, not simply on supplying a component or even a specialty material. And third, these capabilities have experience have been proven and evolved for decades in demanding applications such as automotive, aerospace and defense, industrial and communications. Importantly, we're now applying these capabilities to fast-growing sectors like AI data centers. AES combines 3 complementary businesses: radio frequency solutions, ceramic thermal substrates and rolling laminated bus bars. Collectively, we help customers manage increasingly difficult challenges in signal integrity, heat removal, power conversion and connectivity. Our competitive advantages are consistent with what Ali described, decades of proven performance, trusted OEM relationships, mission-critical reliability, applications and development expertise, a broad portfolio and a global manufacturing footprint. These are the reasons why we have strong collaborative relationships with our customers. They rely on us for technical expertise, because failure is costly and reliability is absolutely essential. AES generated $445 million of sales in 2025 and serves a diversified set of markets. Automotive is our largest segment with industrial, aerospace and defense, rounding out the other largest portions. Put simply, as electronic systems have become faster, hotter and more power intensive, the problems AES become more difficult, and therefore, our solutions more valuable. Our radio frequency solutions business provides specialty copper clad laminates that deliver exceptional signal integrity, directly affecting the range, accuracy and reliability of radar in communication devices. We often think of circuit boards is playing a supportive role to semiconductors, the real stars of the electronics show. But as you'll see in many examples today, Rogers copper clad laminates are an integral part of the electrical architecture, particularly in transmitting and receiving radio or RF signals. Copper clad laminate route signals to antenna structures while minimizing signal loss, managing power distribution and participate in the overall thermal management or heat generation and dissipation. The performance of our materials enable many of our daily activities. In automotive radar, our materials help maximize signal strength and support greater range and resolution. For example, enabling emergency braking if a child runs in front of your car or slowing down a vehicle when it comes to a traffic jam. This is critical when you depend on the adaptive cruise control or blind spot detection systems of your vehicle. In Defense Systems, we enable advanced threat detection, telling an enemy drone from a bird at a very long distance, for example. And in wireless infrastructure, we support critical communications so that you can have a reliable signal to your cell phone whether from a base station on the ground or an orbit. And increasingly, the same capability is relevant at AI data centers where we preserve signal fidelity at transmission speeds as transmission speeds and signal routing challenges rise, making sure the 1s and 0s in a signal arrive in tad. What differentiates Rogers with the combination of low-loss materials performance, excellent reliability and our applications expertise. Customers are designing systems with increasingly demanding requirements and our ability to help them select, qualify and apply the right material makes Rogers as a trusted development partner. Our ceramic enrolling bus bar businesses address a different increasingly connected set of challenges. Ceramic thermal substrates are perhaps the most critical component in a power semiconductor package combining electrical isolation with effective heat dissipation. Our microchannel coolers provide highly efficient liquid cooling for the most demanding applications. Rolling laminated busbars are really the backbone inside power conversion equipment, handling high voltages and currents efficiently while reducing electrical losses, voltage spikes, EMI and system complexity. These products enable higher performance electric vehicles, renewable energy systems, industrial equipment and mass transit, just to name a few. As power levels increase, customers need to remove more heat, convert power more efficiently and package systems within tighter spaces. Rogers brings proven reliability, applications expertise and customized design to these challenges. Importantly, these are the same challenges required by next-generation AI data infrastructure. Automotive showcases all 3 product lines. Automotive radar is so commonplace, we often don't pause to think about all the technology that keeps us safer on the roads today. But Rogers can trace its copper clad laminate to over 500 million automotive radar units over the past decade or so. Vehicle electrification is another sweet spot for AES technology. Most Rogers manufacturing sites are certified to the rigorous International Automotive Task Force or IATF standards to minimize defects, product variation and ensure high quality. We typically secure a few dozen design wins each year across the 3 business units and the industry trend towards higher levels of electrification has provided increased sales opportunity. The opportunity for Ceramic is primarily in the power modules where -- which contain hot silicon or very hot silicon carbide chips. Our substrates in the DC/AC inverters, which connect the battery to the motors support hundreds of kilowatts of power. Think about a few hundred hair dryers pointed at your hand and you can start to appreciate the importance of dissipating that waste heat. We also provide laminated bus bars for efficient power conversion and the traction inverter in premium automotive or more often off-road construction vehicles and in this context, perhaps more visibly in the EV charging stations. Rogers RF laminates were in the very first automotive radar systems back in the 20th century and remain a key component of the majority of automotive safety systems today. Ceramic thermal substrates have been an EV since their rise in the early 21st century. We remain disciplined about where we compete, focusing on applications in which performance, reliability and technical support matter the most. We expect AES Automotive sales to grow at a mid-single-digit rate through 2030. Electrification, as you can see, remains the primary driver. Battery electric and plug-in hybrid vehicle production is expected to expand at low double-digit CAGR through the end of the decade as production moves increasingly towards these new energy vehicles. We also expect increasingly capable vehicle safety systems to support demand for high-performance radar materials, although the mix of technologies and price points will continue to evolve. Our strategy is to concentrate on the higher-performance portions of these sectors where Rogers materials expertise and reliability provide the greatest differentiation. The opportunity is balanced across power substrates, power conversion and radar, giving us multiple ways to participate. We expect aerospace and defense to be AES' fastest-growing core segment with high single-digit growth through 2030. Demand for Rogers' copper clad laminate is supported by rising government dispense budgets including system modernization, especially radar and missile guidance systems, replenishment of stockpiles, increasingly sophisticated radar and sensing as well as expansion in the space and satellite applications. These systems require exceptional signal quality, stable performance and reliability under very severe operating conditions. Rogers has served these applications for decades, enjoys durable customer positions and specified across a broad range of programs that you hear about in the news. Our RFS copper clad laminates are in the air, on the ground, at sea and in space. They're in the seekers and missile systems, ground-based radar, about the birds and the drones I mentioned earlier and a lot of secret systems that we're just not allowed to know or certainly to name. But let me illustrate this with one recent design win. A well-known defense contractor was designing a new high-power radar system for the high altitude surveillance, and they invited our applications experts to a design meeting since we have a long productive relationship with them. They wanted to use materials with pretty unique electrical specifications, thickness, high thermal connectivity and tight manufacturing tolerances. Our team helped them optimize the material selection to give them the largest design window to accomplish the surveillance task. So we expect sales in that airborne system to continue for years as the airplanes are built or retrofitted. We have special PTFE and non-PTFE materials, products with high thermal connectivity, spanning a wide range of electrical applications, which enable our sales and applications engineers to help our customers optimize their systems, design iterations and qualification cycles in A&D are long, but once designed in, supplier physicians kind of do it for years are often decades. Our established relationships with major defense contractors and specialized fabricators, combined with our technical capabilities, position us well to benefit from sustained investment across the sector. AI data centers brings our connectivity and thermal management capabilities together into one compelling adjacency. Ali introduced this opportunity at the company level. I'll now explain where we have the greatest content opportunities and why the underlying technical challenges aligned so directly with AES. As mentioned earlier, semiconductor chips often get the headlines, but chips don't float in space. They need to be supported and interconnected by a circuit board and kept cool. AI infrastructure creates 2 increasingly difficult problems that map directly on to Rogers capabilities. The first, moving enormous amounts of data without losing signal integrity. And two, removing enormous amounts of heat from these increasingly powerful chips. The true power of an AI data centers orchestrate a cooperation of multiple GPUs and CPUs. And some of the latest servers place 4 GPUs and 2 CPUs alongside high bandwidth memory and very close proximity, and that's a good start. But the system gets vastly more intelligent and powerful when servers are connected together and GPUs can communicate directly. This could be done with cables than it was in the past. But currently, this would require about 2 miles worth of cables and 20,000 connections just within a single rack, far more efficient and compact is to make these connections through a high-end circuit board. These circuit boards can be called mid planes, back planes can be a meter in length and may require 24, 48, even I've seen 72 layers of copper clad laminate to fabricate. Performance manufacturing quality are absolute differentiators. As our downstream customers pack these ever more powerful chips ever more densely, directed chip cooling becomes another absolute requirement. Our microchannel cooler technology has been utilized for decades in specialty applications and has the versatility to address the thermal management challenges of increasing power density. Our qualified and scaled capabilities are prime to meet the latest challenges in this evolving segment. With that context, I'll now cover a little bit more of the technical challenges. It's well established that demand for AI is increasing and to increase performance and the industry is using more powerful chips, of course, and is connecting them at even higher speeds so that they can collaborate with each other. Data rates are quickly moving from 56 or 112, even up to 448 gigahertz and beyond. And as a general rule of thumb, again, a rule of thumb, signal strength drops in half as frequency doubles. So it's a diverse large circuit boards like mid planes and back planes I mentioned a moment ago, they need to incorporate lower loss copper clad laminates. So the signals, the 1s and 0s can make it across that meter sized circuit board. The lamina circuit materials that meet today's requirements, often called M6, M7, M8 are just no longer adequate for these most advanced data centers, certainly not in the large boards that I mentioned like mid-planes and back planes. And each generation of material innovation and brings about a 10% to 20% improvement in insertion loss. So industry leaders are actively pulling for lower loss M9, M10 and beyond to improve their signal integrity. Building on our decades of experience with low loss, PTFE based copper-clad laminates, we've developed a solution that exceeds the performance requirements of M9 with a clear path to M10 and beyond. That means that our materials maintain signal fidelity across larger boards, more complex PCBs and allow designers additional loss budget to increase board complexity and address the evolving needs of the industry. The strength of our solution is not going unnoticed, following completion of our internal testing, we began active sampling of our materials to our industry leaders and their favorite board manufacturers. Our applications and development engineers are deeply engaged with these customers, working together in their fabs, and we're extremely encouraged by their confirmatory test results and fabrication validation as we work towards securing design wins. Cooling is the second major AES opportunity in AI infrastructure. Advanced chips are already at kilowatt power levels. It's amazing, and hotspots are becoming more problematic. This requires advances in cooling performance. Our direct to chip-to-chip solution uses customized microchannel structures to remove heat efficiently at the chip level. These coolers can be tailored to specific GPUs, CPUs, custom ASICs, memory devices, each with their own hot spots and cooling needs and are intended to integrate into conventional liquid cooling systems. Our value proposition extends beyond the module itself, more efficient heat removal can support higher compute density and ultimately higher system performance. We bring substantial, relevant experience, 10 years manufacturing microchannel coolers for high-performance CPUs, 25 years serving the high-power laser industry. We've shipped more than 10 million units for various applications with no own field failures. We're actively prototyping with several major industry players and we're likewise extremely encouraged by the feedback from our lead customers as their testing has indicated clear advantages in our performance versus conventional cooling solutions. In closing, we're executing on the strategy, Ali outlined, build on Rogers core strengths in connectivity, thermal management and power electronics, execute with greater speed and customer focus and scale differentiated technologies into large, fast-growing adjacencies. AES has durable positions in demanding applications, automotive and aerospace and defense provide attractive growth and the technology challenges in AI data centers add 2 material growth opportunities for Rogers. I'll leave you with one final thought. The challenges our customers need us to solve are getting harder. Data rates are rising, power density is increasing, heats becoming more difficult to challenge -- manage. Rogers has spent decades building capabilities around precisely those challenges. AES is positioned to grow in our established markets and our strong technology toolbox gives us a credible path into large new opportunities like AI data centers. Thank you for your attention. I'll now turn it over to Brian, who will discuss Elastomeric Material Solutions.

Thank you, Nate. Sorry. And good morning to all of you. You've just heard how AES is applying capabilities to attractive opportunities in their core markets as well as positioning themselves for adjacent opportunities and growth, most notably in areas like AI, data centers. I'll now explain the strength of the Elastomeric Material Solutions or EMS business and how we are also taking our capabilities into compelling adjacencies and opportunities. And show you why we believe EMS can grow through 2030 faster than its underlying markets. So before I begin, let me introduce myself. I'm Brian Ninness, I'm the Vice President of the Silicones business within EMS. I joined Rogers 7 years ago after nearly 3 decades in Engineered Materials, specialty chemicals across a wide variety of applications and end markets. That experience has really provided me with the positive contribution that deep material innovation and application expertise can really help our customers win in an increasingly competitive, challenging and globally competitive world. So there are 3 messages I'd like for you to take away from this presentation today. First, EMS has differentiated capabilities. With a track record of innovation and solving the most demanding challenges and applications that require ceiling, impact protection, pressure management and most importantly, durability. Second, entrenched positions. We have very deep customer relationships across our value chain, build on materials, systems and that application expertise. Customers not really rely on us only for our product, but for help in solving some of their most common complex challenges and applications and designs. Third, by leveraging these core capabilities into adjacent applications, specifically thermal runaway protection and EMI shielding, we are creating a path towards meaningful growth. Importantly, this growth does not require us to build new capabilities or a new customer ecosystem. We will simply leverage technologies that we have, customers and channels that already exist. Together, our established positions in electronics and communications, industrial and automotive provide a durable foundation and a clear path to accelerated growth. So EMS business combines 3 complementary businesses, targeting polyurethanes, silicones and specialty materials. Collectively, EMS helps manage increasingly difficult design challenges that protect our customers sensitive equipment and components, enable their advanced performance and helps them provide them lasting durability. Our competitive advantage are consistent with what both Nate and Ali described, decades of proven performance, trusted OEM relationships, mission-critical reliability, the application and development expertise, an extremely broad material portfolio and global manufacturing and technical support footprint. These reasons explain why leading OEMs continue to look to EMS. Our approach is consultative. It extends beyond merely supplying a product. We work with our customers to discover their specific needs and application requirements early, which then provides information and direction to our material innovation in our overall direction within EMS. EMS generated approximately $350 million in sales in 2025 across the diversified standard markets. Where these broad material platforms solve a really common set of customer problems. Industrial is our largest segment, followed by electronics and communications and automotive and then finally, aerospace and defense. What do we do in EMS? We formulate, we customize and ultimately manufacture specialty polyurethane and silicon foams, silicone sponge, solids composite structures and high-performance thin films and tapes. Put more simply, we sell highly engineered materials into applications where failure is not an option. And long-term reliability is absolutely critical. These materials may be less visible than the actual systems they enable, but the role is absolutely essential. They seal against moisture, dust, light, other contaminants. They manage the pressure within the system. They absorb impact and vibration. They control noise in acoustics and they provide thermal and chemical resistance. As Ali referenced at the very beginning, you likely interacted with a lot of our products without knowing it before you even arrive today. They're in your smartphones in your pockets, they're in the automobile or the Uber that you took, you happen to fly in or an airplane, you took to get to New York City. The EMS products designed into all these various devices and applications do differ by customer requirements and application, but the value proposition is always consistent. Predictable performance across long operating lives, backed by materials and application expertise and customer technical support wherever it's needed. This combination of materials performance, application expertise and proven durability has earned Rogers and EMS, a trusted position with leading OEMs across the globe. Industrial markets. Again, our largest and most durable part of EMS. They comprise no less than 10 different subsegments. I've listed some select examples here. Our core capabilities are targeted towards solving our customers' most challenging and demanding applications. Again, sealing pressure management, impact protection, acoustics and vibration control. Importantly, though, our solutions are market agnostic. We solve the same physics problems repeatedly. Critically, the industrial economy is being rebuilt and reequipped simultaneously driven by industrial automation, overall electrification, supply chain regionalization. And as you heard from Nate, just the unprecedented build-out of AI infrastructure. All of this results in new opportunities for EMS and we can pursue these opportunities through the customers, through the qualification processes and through the channels that are already familiar to us. Thus lowering the commercial barriers to market entry. Therefore, this large industrial base of business for EMS is both diversified revenue today, but more importantly, the capability engine for focused growth tomorrow. This provides confidence that our industrial business will grow at a mid-single-digit rate through 2030. So consumer electronics, again, our second largest market. This market is characterized, as you know, by a rapid technology change, very short design cycles, in a mix, especially recently moving toward more high-end premium devices. While total consumer electronic growth remains relatively modest. If you look at the premium devices, they're continuing to outgrow the broader market. And that is where EMS materials have increasing importance. For example, while the overall smartphone shipment forecast hovers around 1%. The premium end of the market is forecast to grow roughly 6%. Now smartphones do comprise the biggest part of our consumer electronics business, but earbuds, smart speakers, smart devices are also targeted in a big part of our portfolio. Now the consumer pool towards premium devices or if you want to call them the upgrade triggers, is really multifaceted in nature but primarily it's being driven by 3 things: on device, generative AI features, devices that have longer life spans and a narrowing price gap between those premium devices and the rest of the market. Now premium devices typically require more advanced materials. What this does is it provides higher content per device and higher value-add opportunities for a material supplier like EMS. So as a smartphone diagram here illustrates we proactively work with all of our OEM partners, early in the design cycles by providing high-performance materials as they work through that to meet these increasingly difficult design challenges. So our established relationships with leading OEMs in this space give us early visibility into what these design challenges are. They also create opportunities to extend solutions that we create for smartphones, for example, into smart devices and smart speakers. Most simply, this is the Rogers' growth model in action, okay? We combine proven technology, these trusted OEM relationships built over decades, design support and manufacturing near the final device assembly to expand content into these growing markets. This gives us confidence that our consumer electronics business will grow at a mid-single stage through 2030, which will outpace the overall market. Moving to automotive. So automotive is an attractive segment for EMS because our content opportunity actually increases as powertrains become more electrified. While total passenger vehicle production is forecasted to remain relatively flat out to 2030. The consensus view is that battery electric vehicles, plug-in hybrid vehicles will grow at roughly a 12% CAGR out to 2030. Resultingly, by 2030, these battery electric vehicles, plug-in hybrids are projected to represent around 40% global light vehicle production or about 38 million vehicles in 2030. Now that mix shift presents new content opportunities for EMS that align extremely well with our capabilities. The highest content opportunities are within the battery systems themselves. As these battery systems compliance of all these battery cells charge, discharge and age, they expand and they contract. At the same time, as they're building higher density batteries, raises both thermal and safety requirements. Now both of these trends put together drive a need for engineered pressure management and thermal protection materials simultaneously. Importantly, we aren't entering battery systems for the first time. We've been supplying materials to leading electric vehicle OEMs and Tier 1 battery producers for the last 15 years. In addition, we also have a strong base of automotive application opportunities that apply regardless of powertrain, including things like environmental ceiling, noise and vibration management. So all this expertise, paired with these long-standing relationships across the automotive value chain lead us with EMS well to grow our overall content per vehicle at a mid-single digit rate mid-single-digit rates, which, again, is going to outpace overall automotive production moving forward. Now so far, I've described the foundation or the base business of EMS. I want to pivot here and talk about 2 opportunities that Ali mentioned earlier that can accelerate EMS' growth beyond that base business, utilizing the same material platforms, the same customers and same channels for these new applications. Now this accelerated growth is really driven by material innovation that cuts across markets. And it's a natural extension of the foundational capabilities that I've described earlier. Thermal runaway protection or TRP, applies primarily to large lithium-ion battery systems, most notably electric vehicles and stationary energy storage systems. As adoption grows, engineered thermal barriers are becoming absolutely essential to help prevent catastrophic thermal events. Electromagnetic interference or EMI shielding is also growing in importance. As devices become more powerful, they become more compact, they become more connected. And as overall electrification of all the industries and AI infrastructure increases tremendously drives this electrical complexity. Now our confidence in these 2 areas comes from the fact that these are not new areas for EMS. Again, they build on the same materials, customers and value chain relationships that we already have in place. Let's talk about the first thermal runaway protection targets 2 of the fastest-growing applications and largest applications of lithium-ion batteries. As mentioned earlier, global electric vehicles, plug-in hybrid vehicle is growing at 12% CAGR through 2030. While if you look at stationary energy storage systems, they're forecasted a compound at a 16% rate through 2030. Now battery safety standards for EVs especially have become progressively more stringent. Requirements have evolved in just a few years from warning passengers of a thermal event to providing them at least a few minutes to exit the vehicle to now some of the strict fit standards actually requiring no fire or explosion at all. So that combination of rapid battery deployment, rising safety requirements is really expanding the addressable opportunity for engineered TRP materials in these 2 markets. The rising level of stringency is really dramatically changing what our automotive OEM customers and Tier 1 battery producers are requiring from thermal protection and battery materials in these systems. Now if we pivot the stationary energy storage systems, they create a very similar need. These systems must operate for life spans of 15 to 20 years, making thermal runaway protection increasingly important for asset protection and also insurability. So the use cases are different. Passenger safety on the ED side, asset protection on stationary energy storage, but the material challenge is fundamentally the same. Preventing a singular thermal runaway event from propagating to the entire battery system. Now if we look at the ideal material sit between adjacent battery cells in these EV and stationary energy storage systems, that material must perform 2 critical jobs. The first is managing the pressure during just the everyday operation of these systems. As I mentioned, these battery cells repeatedly expand and contract as they charge, they discharge and the age. Now Rogers compression pads accommodate the cell breathing. They manage the expansion across the cells lifetime. They help to maintain a consistent force within the system, and this supports reliable battery performance for OEMs over the lifespan of the vehicle. The second job and the one that is hoped to be extremely rare or actually nonexistent is a suppressed thermal runaway event in one battery cell from propagating to the rest of the battery cells in the system. Now if a battery cell does enter thermal runaway, an engineered barrier material must provide immediate protection. It must withstand temperatures in excess of 800 degrees C, it must maintain this dielectric integrity and it must remain mechanically durable. So these jobs are distinct, but they occur within the same battery system. Thermal [indiscernible] protection is a really compelling adjacency because it builds directly on strengths and capabilities that are -- that Rogers already has. We have more than 15 years of proven experience supply and pressure management materials to the world's leading OEMs. To put that in perspective, just over the past 5 years, we've manufactured and sold over 100 million square feet of material that goes into pressure management pads for electric vehicles, which, depending on the size equates to something between the order of 400,000 and 600,000 parts per week. But in addition to these long-standing OEM relationships we have, they actually give us very early insight into how evolving battery technology is changing, how battery architecture is changing as well as how these safety standards are progressing as we move forward. So historically, Rogers has been a leader in the first job, pressure management. The opportunity now is to combine that proven capability with thermal runaway protection in a more comprehensive material solution. As always, our approach remains disciplined. We collaborate early with our OEMs, with our partners to understand what their specific application requirements are, and we scale as these programs move into production. So moving to EMI. So as the physical economy continues its electrification journey, this growth in overall structural electronics increases the need and criticality for EMI shielding solutions. But it's not only the overall level of electrification that's driving EMI growth, it's an increasing level of connectivity between devices. It's more electronics being placed in less space and these electronic systems in more demanding environments, outdoors, in space, for electric vehicles under the hood. Importantly, this challenge of providing EMI shielding and then simultaneously protecting these systems from harsher environments, again, cuts across markets. In aerospace and defense, you need it for avionic equipment enclosures, you need it for low orbit satellites. Again, we need it for battery energy storage systems. And for electric vehicles for multiple applications from the inverter housing to the battery pack itself to the onboard charger just to highlight a few. For EMS, this translates into a compelling adjacency that is driven by existing capabilities, most notably a track record in providing advanced environmental sealing solutions across markets. So apologies, this slide layout is the same as I just used for TRP. And I didn't do it because of continuity. It's because the underlying growth opportunity and the approach we are taking is exactly the same. We leverage existing capabilities, in this case, environmental ceiling expertise. We build in and layer in additional functionality like EMI shielding, provide one comprehensive solution that addresses 2 critical jobs. Again, just like TRP, the 2 jobs are distinct, but they occur within the same system. EMI Shielding is a compelling adjacency for an established elastomer producer like EMS. Because our customers are increasingly requiring electrically conductive elastomers that are effective at both sealing or protecting their systems, but also protecting against increasing levels of electromagnetic interference. So for today, this is just one final example of the EMS business model. We extend our proven capabilities in material science, application know-how, it displaces that help us create new growth opportunities. So let me close my talk today with actually the 3 messages I started at the very beginning. EMS starts with differentiated capabilities, materials and application. Those capabilities have created durable positions with leading customers around the globe. And those positions now give us a lower risk path in the faster-growing adjacent applications. Our core industrial, automotive and consumer electronics businesses provide a durable foundation, the high-growth opportunities that I just discussed, create the potential to accelerate performance beyond that base. As you heard from both Ali and Nate earlier, the playbook is actually consistent across Rogers, grow in attractive core markets, extend proven technologies into adjacent opportunities and convert that growth into greater earnings power. So with that, I'd like to thank you all for your attention, and I'm going to hand this over to Laura.

So good morning, all. It's a pleasure to be with you this morning. I'm Laura Russell, Chief Financial Officer, here at Rogers. For those of you that I haven't had the opportunity to meet previously, I joined the company in September of 2013. And prior to that, EBITDA is loan experience in the semiconductor industry. During this morning's presentation, we have heard from Ali, Nate and Brian, we shared a lot about Rogers proven capabilities in connectivity, thermal management, parade electronics and engineered elastomeric materials. And how those position us to grow both in our core markets and into new attractive adjacent end markets. Ali outlined the strategy for building a higher growth, higher performing rotors and Nate and Brian ensured how our teams are applying those technologies and competencies developed over decades and demanding applications to enable significant incremental opportunities and to automotive and AI data centers. These incremental revenue opportunities will complement our mid-single digit growth that we forecast in our core business bringing only a shared together financially. I'll discuss the compelling framework that we use in our financial outlook, the financial framework to manage the business the progress that we were raising need and how we expect growth to translate into margins and earnings expansion. Finally, I'll discuss how we intend to allocate the cash generated by that growth. As we review my materials, I think it's important that my objective is to ensure that I provide clear financial outflow to a transformational described. The transformation should grow Rogers from $800 million to $1.5 billion with associated margin expansion driven by our differentiation, scale and execution. Our long-term target should flat more than stronger end market demand. They are supported by a fundamentally improved operating model, a more disciplined cost structure, and focus of organic growth opportunities that build on the technologies and capabilities that Rogers already possesses. Together, these factors create a path to substantially greater revenue, profitability, earnings and cash generation through 2013. Staying back. It's important to review the framework that we use to get how we operate and make capital decisions. The first component is our growth. In our core markets, we intend to outperform underlying market growth through deeper customer engagement, greater cross-selling and improved execution. In adjacent markets, we're applying our proven expertise and it is such as thermal management and signal integrity to customer challenges where Rogers has a clear ability to enable our customers' performance. The second component is profitability. We're using the voice of our customer and things to improve our ability to sharpen our value proposition and direct resources toward investments where we can create a greatest value. At the same time, we're driving continuous androgen across our operations. And benefiting from the scale available within our existing global footprint. The third component is our liquidity and cash allocation. As profit growth increases the cash that we're going to generate, we intend to reinvest first in our organic opportunities that offer the most such a risk adjusted returns. We will also consider strategic acquisitions to add capabilities for accelerated adjacencies, we will maintain balance sheet flexibility to return excess capital to shareholders. Essentially, this creates a reinforcing cycle. Goals prevails profitability, profitability expands our liquidity and liquidity funds for future value creation. I recognize that the objectives that we're presenting today come after a period of underperformance. That said, we're already working on Rogers transformation. Next chart demonstrates that transformation as it relates to our cost structure, and it's already producing measurable results. We have taken both structural and operational actions to create a leaner and more scalable organization. Structural actions include manufacturing footprint consolidation, to meet customers further demands, R&D site consolidation to improve our innovation cycles and savings initiatives in our operations and across the broader business reorganization. Operationally, we have enhanced supplier strategies, improve quality and yields, expanded the use of Six Sigma principles and introduce more rigorous performance measures throughout the organization. These actions are reflected in our year for year results. Across each of the first 3 quarters shown here, adjusted gross margin improved in spite of the pricing and cost pressures. Adjusted operating expense as a percent of sales declined and EBITDA margin improved meaningfully. Critically, these are temporary improvements that reflect changes and how they operate, it increase accountability, faster decision-making, better productivity and a more focused organizational structure. This work establishes the sustainable operating discipline needed to translate future revenue growth and to substantially greater awareness. Our path to meet $ 800 million to $1.5 billion in 2030 has 2 primary components. First, as you heard, we expect our core business to grow approximately mid-single digit rate, contributing roughly $250 million of revenue expansion by 2030. Second, we expect the focused high-growth opportunities that we shared with you today, including AI data centers, advanced battery materials and EMI shielding contribute $450 million. Together, that represents around $700 million of incremental revenue and to Rogers from $800 million top line company to $1.5 billion by 2030. As discussed, we expect the profitability to expand as we grow our revenues. We expect adjusted EBITDA margin to grow from 14.2% in '25 to around 21% by 2020 and ultimately to reach 26% by 2030. High growth opportunities that we shared are expected to be the largest contributor to our EBITDA expansion by 2030 with attractive incremental margins fueled by the differentiation we've already discussed. Growth in our core markets provides an additional source of leverage. We expect meaningful benefits as increased volumes across our global footprint, scale, fixed costs, while ongoing productivity, quality, yield and cost actions more than offset anticipated pricing pressure. Operating expense leverage provides another important contribution. We will invest in the commercial and technical capabilities needed to support our growth objectives. But we expect operating expense to be -- to grow substantially slower than our revenues. After our diligently managed investments, the combination of high-growth opportunities, core business growth, improved utilization continued cost reductions and operating expense leverage is expected to drive approximately 1,200 basis points of adjusted EBITDA expansion by 2030. To prevent context before we go into our capital allocation strategy, and I thought it prudent to revisit our current balance sheet strength. We have grown our on-hand cash and short-term investments by roughly $80 million over the last few years. We'll continue to invest organically and making share repurchases of roughly $75 million. We have not undertaken any acquisitions in the last 5 years and result, we don't have any date. We maintain our revolver balance with $450 million available. So now as I pivot into our capital allocation, our priorities are designed to support growth preserve and financial flexibility and maintaining a clear focus ultimately on our shareholder value. Our first priority is to continue to invest in organic growth. That includes the manufacturing capacity, technical resources, customer development activity and innovation required to capture the opportunities we discussed today. We will stage your investments on customer commitments and appropriate return thresholds. The taking priorities or strategic M&A. We will pursue disciplined opportunities that add capabilities, strengthen market positions or accelerate progress against our strategic objectives. Third, we want to maintain financial flexibility. A strong balance sheet provides resilience and allows us to net attractive opportunities emerge. We intend to maintain prudent leverage and sufficient liquidity through different market cycles. Our fourth priority is to return excess capital to shareholders beyond simply offsetting any dilution from new issuances when it's not required to fund the higher growth, organic and inorganic opportunities. The governance principle for this is very straightforward. Capital will be directed towards the opportunities that achieving greatest value for our long-term share. M&A remains an important potential state. It's not included in any of the organic and financial targets that we presented here today. Specifically, our focus would be in acquisitions to enhance the outlook of our existing business and differentiated capabilities or support our strategic growth priorities. We will evaluate potential acquisitions against 3 broad criteria. First is the attractiveness of the target market. The business should participate in an existing or adjacent market with growth characteristics that meet our objectives. It should align with Rogers strength and customer collaborations, materials expertise and engineering excellence. Second, is the attractiveness of the target itself. We will look for businesses that strengthen our capabilities, our product offerings for our values and culture and offer an identifiable opportunity to improve growth or returns under Rogers ownership. Third is a financial return. Transactions must have a clear path and attractive returns. We will maintain disciplined leverage, limit shareholder dilution and target an appropriate payback period. Just to reiterate, we don't need M&A to achieve the target that we shared today. That means that we retain complete flexibility to remain selective and pursue transactions only then the strength in the company and create compelling shareholder value. Let me close by bringing the components of our financial strategy back together. Our targets provide meaningful milestones for our transformation. For 2020, we're targeting revenue of approximately $1.5 billion plus or minus $50 million. Adjusted EBITDA margin of approximately 20.5%, plus or minus 50 basis points. And adjusted earnings per share of $6 plus 0.50. Overall, by 2030, the opportunities that we presented today, enabling core growth, high growth in adjacent end markets plus our continued focus on cost and capital allocation discipline should deliver $1.5 billion in revenue, 26% EBITDA and $14 of EPS. Several assumptions do underpin our targets. We expect core markets to grow net single digit rate. This will be meaningfully compounded, particularly by 2029 and 2030 as a data center and high-growth opportunities, scale in adjacent end markets. We expect operating expense in absolute terms to increase to support the goals that we presented. However, it will decline meaningfully as a percent of sales to below 20%. And we assume a long-term target in the mid-20% range. At the midpoint, our targets imply a revenue compound annual growth of 12% to 14% and adjusted earnings per share CAGR greater than 40% from 2025 to 2030. We also expect significantly stronger free cash flow and improved return on our invested capital as the business scales. Finally, I'd like to recognize that these targets represent a significant transformation for Rogers. However, there are no aspirations rather than our objectives that are supported by capabilities that we possess today, opportunities that are ready and develop and operating improvements that are already underway. I look forward to providing updates on our progress in our future stations. Thank you for your time this morning, and I'll now hand you back to Steve.

All right. So as mentioned, we'll take a 10-minute break now. And following that, we'll have the Q&A session. Thanks. [Break]

All right. Welcome back. Okay. Great. We're going to go ahead and get started with our Q&A. We'll invite the leadership team to come out here and take a seat. We will have a couple of microphones going around the room. So once we get everyone seated, if you'd like to ask a question, just raise your hand, and we'll bring you the mic. It looks like we got -- Craig and then Dan here in the front. We'll start with Craig.

Yes, Craig Ellis, B. Riley Securities. Thanks so much for all of the information. I really appreciate the depth of insight that you provided. I want to start focusing on things that get us to that 2030 $1.5 billion revenue number, very impressive. And a big part of the path there is our high-growth opportunities. So I'm hopeful that you can identify some of the underlying assumptions we're using with regard to design win visibility, the relative contribution EMS versus ACS and whether or not there's any new technology that needs to develop to realize that growth through this is all product that's out engaging with customers?

Thanks, Craig. So thanks for the question. Let me just -- before I answer the question, just make a comment here. What you see, what we presented is not something that we invented in a suite or a dark room in the back. So this is really the effort of the team. We put a strategy together that we believe in, we're committed to deliver. Now to go back to how that breakout goes, I think the majority of the growth is coming from data center applications. There is some automotive and some automotive and most of it where the majority is data centers. And both the data center applications is the microchannel coolers, which we've been discussing before, thermal management as well as the high-speed digital. We believe we have products today are going into customers' feedback and our internal destine that outperforms what's in the market today, period. So all the feedback we're getting back from customers who are testing, validating the products, giving us that information, that performance-wise, we are above what's in the market today, what outperforming what's in the market today. Where the numbers come from is what I highlighted before. We are not considering what the size of the market is. We're targeting areas where we believe technical challenges are there and there is no current solutions today. That's why we mentioned, for example, on the connectivity side, we're targeting the M9 and beyond. If you look at the market today, the M10 that's public information. There is no solutions today. We believe we're very close to having that solution. M9, we meet those requirements and exceed what's in the market today. On the thermal management, as the power increases as temperature increases. So those are the applications that we're targeting. We're not targeting that 400 watts, 600, 800 watts. We're targeting the thousands of lots. So as those temperatures and those power requirements increase, PAUSE the thermal management, the solution that we're offering is a gain, cooling the source directly cooling the source and the moving the temperature from so. And that's why those applications today or our current solution today is, again, more effective, more efficient at than what's on the market for these applications, the high power ones. So it is mostly AES. If you -- the majority of it will be in the AES side, but EMS also has applications. Again, the TRP that we've mentioned the EMI shielding, that's also an opportunity for us. But the majority of the drivers will be on the high-speed digital, which is the connectivity side, the thermal management, which is the micro coolers, microchannel colors.

That's really helpful, Ali. I'll ask a follow-up, and then I'll hand the mic off. The follow-up is for you, Laura, although there may be contributions from other team members, but we have a very impressive adjusted EBITDA March as we go to 20% and 26%. And it looks like we've got 3 drivers but in different sequence getting there, can you clarify the relative contribution of things that are happening on the COGS line versus in OpEx and the line of sight you have to implementation on those things and the extent to which there's anything new that folds into the business as we get to '28 as we then accelerate for that additional 600 basis points.

Sure. Sure. So one of the slides that I had presented was just the progress that we've made on our transformation this year from a cost perspective. That is something that I would say we're largely through. So in terms of expense and the impact that, that's going to have in our future EBITDA expansion, it's actually going to go the other way because we need to invest or continue to invest to support these growth objectives and the market potential that we see. What you're going to see though on the EBITDA expansion from going from the 14.2% to the roughly 20% and then on to 26% is really driven predominantly by first our growth. We talk a lot about servicing our customers in region, for region, which means that we have a large global footprint and capacity that's available to service our existing demands and then these new high-growth opportunities. And I'm not trying to indicate there won't be additional potential investment required, but not in the more near term. At least not significant. But what you're going to see is the new opportunities come in. They're going to leverage the capacity that we have in our existing footprint. So I'm going to do a better job from scaling and utilizing that. The other thing you're going to see is when we're providing differentiated solutions to the market, and that's going to have differential pricing. So we're going to see some benefit there as well on our chart to our EBITDA expansion. And then we will try to thank sorry -- I lost my train of thought. But yes, I think it's predominantly the revenues -- the other things already that I did need to mention I don't want to say of is the cost progress that we've made. We're not fully there. We've made a lot of significant improvements, but there's incremental opportunities for you on that. So as an example, current yield performance in our factories has progressed, but we've still got room there. So when I look in the '25 to '28 time frame, I would see the margin expansion EBITDA predominantly is going to come from our COGS and our top line. And it's really split between leveraging and our ongoing operational excellence and efficiency and the new revenue and the absorption I'm going to experience. When I get beyond '28, much more of the contribution and the margin expansion is coming off of that acceleration in the topline and accelerating and differentiated revenue performance.

Dan, next.

Dan Moore from CJS Securities and thank you for all the detail. Maybe talk a little bit about conversations and feedback you're getting from customers in beta testing for microchannel coolers as well as PTFE laminates and what are the gating factors between now and when you'll be in a position to make some of those initial customer announcements?

Like I mentioned earlier, I think all the feedback that we got so far is being confirmed in what we've tested and qualified internally. And the performance of the products that we supply in the prototypes significantly better than what's out there today. And I'll let the guys who are actually working on at probably comment more. With regard to the timing, we are really hopeful that within the next 2 quarters, we would be announcing some design wins. That's the time that it is controlled mostly by the customers, the end application. So they've got to be ready, too. But -- in some cases, on the microchannel coolers, I believe we're right now on Generation 3. I'm looking at a over there who handed the project, and I believe we're in the Generation 3 of improvement. So we're really -- we're progressing very well in there. And we expect, again, announcements within the next 2 quarters. Do you want to add something, Nate?

Yes. No, I think you covered it very well, Ali, but I'll just underscore that these customer engagements are generally designed at a very specific system, let's call it, a Board, a box, a GPU or configuration. So the -- we're not looking at a -- here's our glossy brochure, would you like to buy from Rogers. We're really engaged with our customers about what's their problem, what are we trying to solve? Is it a hotspot? Is it a heat removal rate? Is it a data speed. So we're really engaged with the customers about their very specific challenges.

Maybe a quick follow-up. And Laura, you alluded to this in answering Quick's last question. But just talk about current capacity in place to accommodate the growth, both in the core, that 5% mid-single-digit core as well as these really large emerging opportunities and CapEx requirements over the time frame.

Do you want to take that?

Sure. So what I would say is that with the current information, the expected ramp schedules that are assumed in the numbers that we shared, we largely have the capacity in place to service the opportunities through really '28, at least partly through the year. What I would say, though, is as we discussed one of your prior questions, the customer engagements and the design wins, as we see them, I get more definitive confirmation on their volumes and their ramp schedule. We will invest our capacity appropriately. And you saw with the information that I shared on the balance sheet. The existing position that we have and the capacity that we have. But even with that said, our current line of sight would suggest the cap intensity, shouldn't be overly onerous. And what I mean by that is you know our current guidance for 2026 is $30 million to $35 million. If I look forward in the next couple of years, I would anticipate something in slightly more in the [indiscernible] range.

As a percentage of sale.

As a percetage of revenue.

Okay. I think we had a question in the middle. I may have missed it earlier. David will go there next. Thanks.

Dave Silver, Freedom Capital Markets. You set out the 2030 targets, which we're very eye-catching. And we're all wondering, well, what about the next couple of years? In other words, the credibility of your 2030 targets is in a real way kind of connected to maybe getting from here to 2028. And when I am thinking of Laura talked about capacity increases, but you already do have capacity in place that it's not underutilized, but the utilization is not where you had hoped it would be. And I'm just thinking to bridge the gap between now and maybe when the data center opportunity starts, I mean, is that 5% core growth enough to really hit your margin and cost targets. So I'm thinking of Ceramic and [indiscernible] in China in particular. But what kind of bridges the gap here? Or does the 5% core type of growth get you those volume-based operating leverage benefits that are sketched out there, I guess.

David we presented the number for 2028. So we already put a milestone there, 2028. And that is not a 5% growth. Obviously, it's a higher than 5% growth. We expect data center business to start rolling in second half '27. So we will start seeing that in '27. With regard to capacity utilization, we continue to improve the current business we announced last quarter that we won 2 new opportunities in Asia for the [indiscernible] business. So that's actually consumed some of that capacity is taken that -- some of that capacity. It depends also how fast the microchannel quarters will take off, then we're going to start shifting some of the capacities, as we've mentioned before across regions. So -- because we -- our commitment today is to build that microchannel coolers probably in the German facility, and then we can shift some of the other business somewhere else, whether to China. So capacity utilization, we see it increasing. And that's, again, baked in the numbers because the EBITDA number for '28 is 21%, actually. So we are already seeing the benefit of this capacity utilization.

Okay. And the next question would be kind of about protecting your intellectual property here. So PAUSE a lot of your growth has and on as Ali just said, you have solutions to problems that no one has solved before. And I imagine there's a lot of people who would like to solve those problems and are putting a lot of resources towards that end. You have a global network, you sell 45% or so into Asia. So what safeguards or what are your -- what's your strategies in place to kind of protect that intellectual property and make sure your solutions are the ones that get the market ahead of competition?

Again, most of our solutions are already patent protected from that perspective. So we have the patent protection. With regard to the enforcement of that, that's kind of more difficult, as you know, to manage. What I tell my team, and that's what I lived on my life in my career is, we just need to maintain 2 steps ahead of the competition. They can copy us, they can do whatever they want to do. As long as I'm ahead of them, I think that's how we're going to be on business with new designs and maintain our leadership. That's the challenge for us. This is where we are today. And that's why I'm really excited about the opportunity because we think from a technical perspective, we're ahead of the competition. And we need to maintain that leadership, and I have the team that will do that.

Okay. I think we had a hand from James and then John.

James Cameron, UBS. I just wanted to ask on kind of your price versus volume algo. It does seem like you talked about your cost savings but you are delivering pretty strong incremental margins as you get to your 2030 targets. Is there any price baked in as you look at some of these high-growth markets? Or is it more similar to what you've done historically?

Without discussing in detailed pricing, look, we need to be competitive. I mean it's -- we have to maintain our competitiveness. So we're focused on our costs. And obviously, the market is going to drive what the pricing is. As Laura mentioned, if you have a solution, a differentiated solution, you make a and a little bit more higher pricing or premium on the pricing than the competition. So that's already baked into the numbers that we have.

I think just to reiterate, again, the other thing I would say is just the same, focus that we have operationally on a continuous improvement. The other thing that's going to assist us is when we get to the years and we have this higher volume, we're going to be benefiting from that through our manufacturing fiction. And that's also going to be significant, which is also assess center and more than offset the price and creation that we have assumed and that we'll make through our models.