Corning Incorporated Fourth Quarter 2025 Earnings Call - Springboard upgraded to $11B by 2028, Meta deal anchors U.S. optical expansion

Speaker 7: Ladies and gentlemen, thank you for standing by. Welcome to Corning Incorporated Fourth Quarter 2025 Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today’s conference is being recorded. It is my pleasure to introduce to you Anne Nicholson, Vice President of Investor Relations. Please go ahead.

Anne Nicholson, Vice President of Investor Relations, Corning: Thank you, and good morning, everybody. Welcome to Corning’s Fourth Quarter 2025 earnings call. With me today are Wendell Weeks, Chairman and Chief Executive Officer, and Ed Schlesinger, Executive Vice President and Chief Financial Officer. I’d like to remind you that today’s remarks contain forward-looking statements that fall within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks, uncertainties, and other factors that could cause actual results to differ materially. These factors are detailed in the company’s financial reports. You should also note that we’ll be discussing our consolidated results using core performance measures, unless we specifically indicate our comments relate to GAAP data. Our core performance measures are non-GAAP measures used by management to analyze the business.

For the fourth quarter, differences between GAAP and core EPS included non-cash, mark-to-market adjustments associated with the company’s translated earnings contracts and foreign-denominated debt, as well as constant currency adjustments. As a reminder, the mark-to-market accounting has no impact on our cash flow. The reconciliation of core results to the comparable GAAP value can be found in the investor relations section of our website at corning.com. You may also access core results on our website with downloadable financials in the Interactive Analyst Center. Supporting slides are being shown live on our webcast, and we encourage you to follow along. They’re also available on our website for downloading. Now I’ll turn the call over to Wendell.

Wendell Weeks, Chairman and Chief Executive Officer, Corning: Thank you, Anne, and good morning, everyone. Today, we announced fourth quarter and full year 2025 results. We delivered another excellent quarter. Year-over-year, sales grew 14% to $4.41 billion, and EPS grew 26% to $0.72. We expanded operating margin 170 basis points to 20.2%, achieving our Springboard target a full year early, and we expanded ROIC 150 basis points to 14.2%. For the full year 2025 versus the prior year, we delivered double-digit sales growth, with EPS growing twice as fast as sales and free cash flow growing three times faster than sales. Today also marks the second anniversary of Springboard, and the plan has certainly been a tremendous success to date.

Since our quarter four 2023 launch point, we have transformed the financial profile of our company. We expanded operating margin by 390 basis points to 20.2%. We grew EPS 85% to $0.72, and we expanded ROIC 540 basis points to 14%. We also nearly doubled free cash flow in 2025 to $1.72 billion from $880 million in 2023. In total, we now have a highly profitable launch point for future growth, and excitingly, we have even stronger long-term growth ahead. Today, we are upgrading our original Springboard plan to now add $11 billion in incremental annualized sales by the end of 2028, up from our original $8 billion. So we feel great about our position entering 2026.

In quarter one, we expect year-over-year growth to accelerate, with core sales up approximately 15% to a range of $4.2 billion-$4.3 billion. Looking at 2026, our internal Springboard plan now adds $6.5 billion in incremental annualized sales by the end of the year, up from our previous $6 billion plan, and our high confidence Springboard plan now adds $5.75 billion, up from our previous $4 billion plan. Quite simply, our strategies are working. We’re seeing remarkable demand for our innovations and manufacturing capabilities, and we see a larger, long-term growth opportunity through 2026 and beyond. Recently secured customer contracts, including the one we just announced with Meta, only increase our confidence. We’ve been getting a lot of questions about the Meta agreement from our investors....

So before I talk about Springboard in more detail, let me take a moment to outline the key elements. Just yesterday, we announced that Corning and Meta announced a multi-year, up to $6 billion agreement to support Meta’s apps, technologies, and AI ambitions, using our newest innovations in optical fiber, cable, and connectivity solutions. This long-term partnership with Meta reflects our commitment to develop, innovate, and manufacture the critical technologies that power next generation data centers here in the U.S. Together with Meta, we’re strengthening domestic supply chains and helping ensure that advanced data centers are built using U.S. innovation and U.S. advanced manufacturing. Meta will serve as the anchor customer for the expansion and upgrading our manufacturing and technology capabilities across our operations in North Carolina. We are concluding similar long-term agreements with other major customers to dedicate capacity for them as well.

Taken together, these agreements enable Corning to provide our customers with secure U.S. origin production of our most advanced Gen AI high-density innovations. Now, we’re also seeking to appropriately share the cost and risk of such expansions with our customers, and we structure our agreements accordingly. These structures include components like customer prepayments and stringent long-term customer commitments to provide revenue assurance. For longtime followers of Corning, you would recognize the model is quite similar to our extremely successful Gen 10.5 agreements with our display customers, and most recently, Apple’s $2.5 billion commitment to produce 100% of iPhone and Apple Watch cover glass in our Kentucky facility. Basically, we’re taking the proven approach in our glass businesses and applying it to optical communications.

As a result, we will serve our customers, grow organically, and share risk appropriately so that we can deliver the strong returns for our investors that are outlined in our Springboard plan and underpin our upgraded plan. So now let’s talk more about the Springboard upgrade. I’ll start with the basics of the plan. When we introduced Springboard in quarter 3, 2023, we used this chart to explain our incremental sales opportunity using our quarter 4 projected sales of $3.25 billion as the starting point, which put us at a $13 billion annualized run rate. The y-axis represents incremental annualized sales above our quarter 4 2023 run rate, and the x-axis represents time for the following 5 years. Now, let’s fill in some numbers.

Here’s our original internal non-risk-adjusted plan, which reflected potential growth of $8 billion in annualized sales run rate by the end of 2028, with $5 billion by the end of 2026. We took this opportunity and translated it into a high confidence plan to help inform investors. To do that, first, we focused on a three-year time frame. Second, we probabilistically adjusted for different potential outcomes in each of our market access platforms, including market dynamics, timing of secular trends, successful adoption of our innovations, as well as volume, pricing, and market share across all of our businesses, and of course, the potential that some of our markets may go through down cycles. We purposely drew this as a wedge. We weren’t trying to guide every quarter for the next 12 quarters.

We said it obviously won’t be a straight line, but we were also not dealing with a hockey stick. When we built the plan, we expected to see a strong growth early, and we did. In March of last year, we upgraded our internal and high confidence plans by $1 billion to add $6 billion and $4 billion respectively. So as I previously noted, we’ve made excellent progress and achieved our upgraded high confidence sales target a full year ahead of plan, adding $4.6 billion of incremental annualized sales since the launch of Springboard. As you can see, we are also performing well against our internal plan. As we look ahead, we expect our strong momentum and progress to continue. Of course, at its core, our Springboard plan was about more than our ability to grow organically. It was about enhancing our profitability base.

We provided you with one metric to track our progress, an operating margin target of 20% by the end of 2026. As we executed Springboard, you can see that we expanded our operating margin significantly. In the fourth quarter, we achieved the 20% target a full year ahead of plan. This is just one example of how significantly we have transformed the financial profile of the company over the past 2 years. To illustrate my point, let’s compare a snapshot of key metrics at the launch of Springboard versus today. In just 2 years, we’ve grown sales 35% to $4.4 billion. We’ve improved operating margin by 390 basis points to 20.2%, grown EPS 85% to $0.72, expanded ROIC 540 basis points to 14.2%.

For free cash flow, let’s look at full year numbers. In 2025, we delivered $1.72 billion, and that’s almost double what we delivered in 2023. In total, the first two years of Springboard have simply been a tremendous success. We established a new base from which to launch another round of strong, more profitable growth, and that takes us to our upgrade. Let’s look at the highlights of the sales growth we now anticipate, having completed our recent planning cycle. First, as I showed you, our original Springboard plan added $8 billion incremental annualized sales through 2028. We are upgrading our internal plan to now add $11 billion in incremental annualized sales. This represents a double-digit growth rate from the quarter we just closed through the end of 2028. This upgrade also impacts this year.

Our internal plan now adds $6.5 billion in incremental annualized sales by the end of 2026, up from the previous $6 billion plan. Our high confidence plan now adds $5.75 billion in sales by the end of 2026, up from the previous $4 billion plan. You will note our increasing confidence in delivering our growth objectives. Two years into the three-year plan, we’ve hit key milestones and advanced strategic initiatives, like our announcements with Meta and Apple, that increase our probability of success. We feel really good about our performance going in to year three of Springboard. To wrap things up this morning, as we mark the second anniversary of Springboard, the plan has clearly been a success. We’ve transformed the financial profile of our company, and we’ve established a powerful base for future growth.

Excitingly, we are now pursuing an even larger growth opportunity on that enhanced profile with significantly higher returns. We feel great about our position as we enter 2026, and this morning we wanted to make sure that we shared our new top-line growth numbers with you because it’s such a significant upgrade. Now, we’ll get back to you in the coming months to do a more detailed review of our upgraded Springboard plan. We would like your input and ideas on the most helpful way to portray the plan and the associated metrics. It’s really so interesting, isn’t it? Here we are celebrating our 175th birthday as a company this year, a feat so few companies ever attain.

I think it’s pretty cool that we’re on this exciting journey from our original Springboard launch at the end of 2023 to essentially doubling the size of the company in the coming years. So thank you for joining us in this exciting era of Corning’s history. I’m really looking forward to continuing the dialogue and updating you on our progress. Now, let me turn things over to Ed for more detail on our results and outlook. Ed?

Ed Schlesinger, Executive Vice President and Chief Financial Officer, Corning: Thank you, Wendell. Good morning, everyone. In the fourth quarter, we delivered outstanding results that not only capped off a record year, but also illustrated the tremendous success of our Springboard plan to date. So this morning, I will provide details on our performance, our upgraded Springboard plan, and our approach to capital allocation. Let’s start with our results. Year-over-year, in Q4, sales grew 14% to a record $4.4 billion. EPS grew 26% to $0.72. Operating margin expanded 170 basis points to 20.2%.... ROIC grew 150 basis points to 14.2%, and we delivered strong free cash flow of $732 million. We delivered both our high confidence sales plan and our operating margin target of 20% a full year early.

For the full year, we grew sales 13% to a record $16.4 billion. EPS grew more than twice as fast as sales, at 29% to $2.52. Operating margin expanded 180 basis points to 19.3%, and we delivered strong free cash flow of $1.7 billion. Turning to our business segments. In Optical Communications, Q4 sales were $1.7 billion, up 24% year-over-year. Net income was $305 million, up 57% year-over-year, and net income margin was 18%. For the full year, sales were $6.3 billion, up 35% year-over-year. Net income was $1 billion, up 71% year-over-year.

The majority of growth in Optical was driven by the outstanding adoption of our new Gen AI products. For the full year, our enterprise business, where we capture sales for inside the data center, grew 61% year-over-year, and the hyperscale data center portion of our business grew significantly faster. We also saw year-over-year sales growth in our carrier networks business, which was up 15% for the full year. This growth was primarily driven by sales to interconnect data centers. The growth we are seeing in Optical Communications is an important component of the Springboard upgrade we are providing today. We expect this segment to continue to drive significant growth. Our recent Meta announcement is a great proof point. Moving to Display, fourth quarter sales were $955 million, and net income was $257 million.

For the full year, we provided a target for net income in the range of $900 million-$950 million, and net income margin of 25%. We exceeded both goals this year, delivering $993 million of net income and a net income margin of 27%. Looking ahead, in the first quarter, we expect the glass market and our volume to be down mid-single digits sequentially, in line with normal seasonality. As a reminder, we successfully implemented double-digit price increases in the second half of 2024 to ensure we can maintain stable US dollar net income in a weaker yen environment. We’ve hedged our exposure for 2026, and we have hedges in place beyond 2026 through 2030.

We continue to expect to deliver annual net income of $900 million-$950 million, with net income margin of approximately 25%, consistent with the last five years. Turning to Specialty Materials, the business delivered a strong fourth quarter, with sales up 6% year over year to $544 million, and net income up 22% to $99 million. For the full year, we outperformed end markets, with sales growing 10% to $2.2 billion, and net income growing significantly faster at 41% to $367 million. Results were driven by increased demand for premium products and growth in our Gorilla Glass Solutions business, with industry-leading flagship devices featuring our latest cover materials.

Looking ahead, we expect our more Corning content approach to increase demand for our innovations and manufacturing capabilities, and we anticipate significant growth in this segment as part of our upgraded Springboard plan. Our expanded partnership with Apple creates a larger, longer-term growth driver, and we continue to innovate and advance the durability of our products to offer consumers industry-leading glass solutions for mobile device applications. A great recent example is the new Samsung Galaxy Z Trifold, a multi-folding device designed with our ultrathin bendable glass solution on the interior, Gorilla Glass Ceramic 2 on the exterior, and camera lens covers featuring Gorilla Glass with DX. Turning to Automotive, segment sales of $440 million were down slightly year-over-year in Q4, and for the full year, were down 3%. The heavy-duty diesel market in North America and Europe remained weak.

Net income of $63 million was up 3% for the full year. Net income was up 7%, driven by strong manufacturing performance. For 2026, industry analysts forecast light-duty vehicle production to be flat to down slightly, and for the heavy-duty market to remain flat. We remain focused on executing our core Corning growth strategy in Automotive as additional content is required in upcoming vehicle emissions regulations and as technical glass and optics gain further adoption in vehicles. Turning to life sciences, full year sales of $972 million were consistent with the prior year, and full year net income was $61 million. Finally, Hemlock and emerging growth businesses’ Q4 sales were $526 million, up 62% versus the prior year, driven by growth in polysilicon and module sales for the solar industry. Q4 net income of $1 million was down year-over-year.

As we have shared with you, we are ramping capacity to make additional polysilicon, wafers, and modules to build a much larger solar business. The cost of that ramp is the primary drag on net income. As a reminder, we plan to build solar into a $2.5 billion revenue stream by 2028, with profitability levels at or above the Corning average. Now, let’s turn to our outlook. For the first quarter, we expect year-over-year growth to accelerate, with sales growing approximately 15% year-over-year to a range of $4.2 billion-$4.3 billion. We expect EPS to grow significantly faster at about 26% to a range of $0.66-$0.70.

As was the case in Q4, our Q1 guidance includes the continued temporary impact of our solar ramp of approximately $0.03-$0.05, as we continue to bring up capacity to meet committed demand. We expect our sales to increase and our profitability to improve as we move through the year. For the full year, we expect capital expenditures to be about $1.7 billion, $a few hundred million above our depreciation level. Even with that, we expect to generate significantly more free cash flow year-over-year, while continuing to invest strongly in our growth vectors, aided by customer financial support. Stepping back, as we mark the second anniversary of Springboard, the plan has been a tremendous success. Over the last two years, we fundamentally transformed the financial profile of the company.

From Q4 2023 to Q4 2025, we expanded operating margin by 390 basis points to 20.2%, grew EPS 85% to $0.72, and expanded ROIC 540 basis points to 14.2%. We also doubled full-year free cash flow to $1.7 billion in 2025 versus the year of 2023. We are operating from a much stronger profitability base. You see the margin and cash improvements already reflected in our fourth quarter 2025 results. Additionally, you just heard from Wendell that we are upgrading our Springboard sales plan. Our internal plan now adds $11 billion in incremental annualized sales by the end of 2028, up from our original $8 billion plan. To put this in perspective, when we started Springboard in Q4 2023, our annualized sales run rate was $13.1 billion.

Delivering our internal Springboard plan puts our annualized sales run rate at $24 billion by the end of 2028. We almost double our sales run rate over this time period. Importantly, the combination of stronger sales growth with a dramatically enhanced financial profile will result in much more cash generation. We are also upgrading our internal and high confidence plans for 2026. Our internal plan now adds $6.5 billion in incremental annualized sales by the end of 2026, up from our previous $6 billion plan, and our high confidence plan now adds $5.75 billion in incremental annualized sales by the end of 2026, up from our previous $4 billion plan. We’ve significantly closed the difference between the high confidence and internal plans because of our increased visibility, the success of new products and customer commitments to our innovations.

One thing I’d like to note is that we are not changing our operating margin target at this time. We developed our original target to build an exciting, highly profitable platform to support higher growth returns on our innovations. At this level of profitability, we would be delighted with more growth. Our target is to continue to be at 20% or above on operating margin. And to help you with your modeling, we’ll handle profitability expectations through our normal guidance process. We expect to share more with you about our upgraded Springboard plan in the coming months. And since our upgraded plan will generate higher cash flows, I want to take a moment to share our approach to capital allocation. We prioritize investing in organic growth opportunities that drive significant returns.

Overall, we believe this approach creates the most value for our shareholders over the long term, and our investors have confirmed they see the value in this approach. To deliver the larger growth opportunity in our upgraded Springboard plan, we need to invest. As we invest, we will use a variety of tools to share the cost and risk with our customers, including customer prepayments and stringent long-term customer commitments, to ensure we generate strong returns on our investments and secure our planned cash flows. We also seek to maintain a strong and efficient balance sheet. We’re in great shape. We have one of the longest debt tenors in the S&P 500. Our current average debt maturity is about 21 years, and we have no significant debt coming due in any given year. Finally, we expect to continue our strong track record of returning excess cash to shareholders.

We already have a strong dividend. Therefore, as we go forward, our primary vehicle for returning excess cash to shareholders will be share buybacks. We have an excellent track record. Over the last decade, we repurchased 800 million shares, close to a 50% reduction in our outstanding shares. Because of our growing confidence in Springboard, we started to buy back shares again in the second quarter of 2024, and we have continued to do so every quarter since then, and we expect to continue buying back shares going forward. Now, before we move to Q&A, we just reported quite a lot of news, so let me reiterate the key takeaways. First, our current performance is outstanding. We delivered fantastic results for 2025, and we enter Q1 with exciting momentum and accelerating growth.

Second, over the first two years of Springboard, we fundamentally transformed our financial profile, establishing a higher profitability base from which to grow going forward. Third, we now see an even larger growth opportunity. Therefore, we just upgraded our Springboard plan in both the near term and longer term. Because of our improved financial profile and higher growth expectations, we expect to generate significantly more cash as we go forward, creating a very compelling plan for shareholder value creation. I look forward to engaging with you to discuss our upgraded Springboard plan in more detail, to get your input on the most helpful way to portray our plan, and of course, to update you on our progress. Now, before we move to Q&A, I’m gonna turn it back to Wendell for a moment.

Wendell Weeks, Chairman and Chief Executive Officer, Corning: Thanks, Ed. I just want to let everyone know that our beloved head of Investor Relations, Anne Nicholson, will be retiring after 40 years of exceptional service to Corning. Now, I first met Anne when she was a young process engineer, and I was a shift supervisor almost 39 years ago. We have followed each other through many roles in subsequent decades. My personal favorite, where she was my supervisory effectiveness instructor a long time ago. So Anne, thank you for my success as a supervisor. More importantly, Anne, thank you for being such a good friend and advisor and trusted colleague, and most importantly, thank you for showing what it means to be Corning Blue.

Anne Nicholson, Vice President of Investor Relations, Corning: Thank you, Wendell. All right, operator, we’ll now turn it over to questions.

Speaker 7: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced, and to withdraw your question, please press star one one again. The first question will come from Wamsi Mohan with Bank of America. Your line is open.

Speaker 10: Yes, thank you so much. Wendell, we’ll all have to get together to share Anne stories on this news. I guess, like, on my question, you noted that there are similar long-term agreements with other major customers to dedicate capacity. Can you help us think about if any of that is already baked into your Springboard plan? And secondarily, there are, the optical fiber market has been very tight globally. Would you say that you’re experiencing supply constraints at the moment, and do you have a view on how pricing could evolve on the fiber side, given these kind of constraints?

Wendell Weeks, Chairman and Chief Executive Officer, Corning: Okay, let’s start with the similar agreements to Meta that we are in the process of concluding. Okay, first, let’s size them. They are of a similar size and scale, each of them, to the Meta agreement, so very significant obviously. What is our approach to these in the Springboard plan? As you have noted, we tend to be very thoughtful and conservative as we give these upgrades. So we have not yet included everything that those could mean, because we have yet to conclude all of those agreements. And also remember, this, we are dedicating capacity for these customers that we’re in the process of building now. So we won’t see the financial impact really until you get into 2027, and then it will continue to build through 2028. So that is the way I would portray those.

Before I get to the second question, Wamsi, did that address your question, and do you have any further follow-ups on that question?

Speaker 10: No, that’s good, Wendell. Thank you.

Wendell Weeks, Chairman and Chief Executive Officer, Corning: Okay. As far as the optical fiber market, I would say on a generic basis, it is our opinion that there is enough fiber in the world to meet demand. Now, what our capacity expansions are about is about our new high-density products in fiber, in cable, and in connectivity. And for those, we are experiencing a very, very robust demand, and that is why we continue to expand our capacity and improve our productivity in these products. If we could make more of these new products, we could sell more. And it is for those type of products that we are dedicating these capacity through these agreements. Is that a good answer to your question, Wamsi?

Speaker 10: Yeah. Is there a pricing element, Wendell, though, that we’re not yet maybe seeing that potentially, as you’re talking about these fairly massive amounts of demand coming in, would that change the economics around pricing for you?

Wendell Weeks, Chairman and Chief Executive Officer, Corning: Yes. So, what you’ll tend to experience here is, over time, you’ll see a mix of impact of these more valuable innovations. These innovations enable our customers to have better and more reliable optical performance in about half the space, with significantly reduced installation cost. Whenever we create this much value, usually some of that value creation will end up accruing to our shareholders. We would assume that that will be so in this case as well, as we begin to master our manufacturing of these product sets. So over time, the more valuable our innovations are, we would expect our profitability to improve.

Speaker 10: Okay, great. Thank you so much, Wendell.

Speaker 4: Next question.

Speaker 7: Our next question will come from Josh Spector with UBS. Your line is open.

Speaker 5: Yeah. Hi, good morning, and, congrats, Anne. I wanted to ask first, just on similar lines with the capacity that’s being added. So if we think about Meta as a share of your enterprise sales today versus what this agreement implies, are they gonna disproportionately buy more from you after this agreement? And are you adding capacity to match that added sales, or is it less than that, meaning your capacity might tighten a bit as it relates to this agreement?

Wendell Weeks, Chairman and Chief Executive Officer, Corning: Okay. So to the first is sort of relatively small. Last year, Ed, maybe help me with some of the numbers, our enterprise business was about $3 billion for the year. Roughly two-thirds of that would be the hyperscalers, of which Meta was one.

Speaker 10: Yeah, that’s right. We were a little over $3 billion in enterprise, and, Wendell’s right. I think a good note was our enterprise business, in total, grew 60%. The hyperscale portion of that grew almost double that rate in 2025.

Wendell Weeks, Chairman and Chief Executive Officer, Corning: So with this sort of significant agreement, you’re obviously seeing a continued very high growth into the future. Now, you asked the question of, does this mean that relative to our other customers, Meta will be getting a lot more? I think was the thrust of your question. And what I just was sharing with you is we’re concluding other similar size and scale agreements, several of them, with other of our major customers. So what I think we tend to think about it as, is not so much a shift in what portion of our product sets our various customers get, is being the overall, the pie is going to get much bigger, and then people will decide sort of what slice of that they want. Does that address your question, Josh?

Speaker 5: It, it does. I mean, I guess what I’m trying to figure out here, does this-- so if we thought hyperscalers were gonna grow at X%, and Meta within one of them, you know, we’re baking something like that into our estimates of what your growth would be. You know, does this-- it sounds like this kind of codifies that growth and maybe secures them some of that capacity as you grow into the future, versus, you know, Corning capturing more share of that pie. That’s what I want to make sure I, I understand, if, if maybe you’re capturing more share of that pie or not.

Wendell Weeks, Chairman and Chief Executive Officer, Corning: Thank you so much, Josh. So you will have your point of view on sort of the rate of optical growth in GenAI and our hyperscalers. It is true that our new products and the reaction to those new products is increasing the demand for our products relative to the demand of others’ products, mainly because of the unique advantages these innovations are offering. Now, how all that will shake out, I am not sure, but I like our hand a lot better than I would like anybody else’s.

Ed Schlesinger, Executive Vice President and Chief Financial Officer, Corning: Thanks, Wendell.

Speaker 12: Thank you.

Ed Schlesinger, Executive Vice President and Chief Financial Officer, Corning: Thanks, Josh. Next question?

Speaker 7: The next question will come from Meta Marshall with Morgan Stanley. Your line’s open.

Speaker 6: Thanks. Great, and congrats on the quarter. I just wanted to ask kind of one clarifying question about the Meta deal, just since you mentioned kind of expansions on high-capacity cable. Would any of what is kind of included in that deal be included in the carrier line item, or is that all kind of being counted in enterprise today and going forward? And then maybe on a second question, just if you could kind of give a sense of CapEx for the year as you start to kind of make out some of these capacity investments. Thanks.

Wendell Weeks, Chairman and Chief Executive Officer, Corning: Well, first, I’d like to thank you for participating in that CNBC special that was done, Meta. I appreciate it. Then I’ll turn it over to Ed for the answers to your questions.

Ed Schlesinger, Executive Vice President and Chief Financial Officer, Corning: Yeah. So on the accounting of the Meta deal, you can think of our accounting protocol as when we’re selling to a hyperscaler directly, like Meta, we’ll account for that in our enterprise business. And when we’re selling to a carrier, like Lumen or AT&T, for example, we account for that in our carrier business. The only thing that gets a little bit, you know, maybe confusing is that data center interconnect has typically, at least to date, for us, long-haul data center interconnect has gone through carriers. So our customers, for example, Lumen, are, you know, building out networks for data centers. We think of that as sort of outside the data center. That sits in our carrier business. But the Meta deal would be all in enterprise. Does that make sense?

Speaker 6: That does. Yep.

Ed Schlesinger, Executive Vice President and Chief Financial Officer, Corning: Okay. And I’m sorry, can you, can you repeat your second part of the question?

Speaker 6: Just the CapEx. How we should think about CapEx in terms of 2026?

Ed Schlesinger, Executive Vice President and Chief Financial Officer, Corning: Yeah. So, we plan to spend about $1.7 billion in CapEx. For reference, we spent a little under $1.3 billion this year. Our depreciation level happens to be around that $1.3 billion level. So we’re spending a little bit more in 2026. We plan to spend a little bit more. That is good. You know, we have a lot of growth opportunities. We want to ensure that we invest for those opportunities. You know, optical is a place that you can think about where we’ll direct a lot of that capital. And of course, as we shared on the call, we look to ensure we get a really strong return on those investments. Sometimes that gets accounted for by customers providing an upfront payment.

Sometimes that gets accounted for in the nature of our agreement with the customer, so that may, you know, show up in the operating cash flow, the cash section, or against our capital. But you can think of us as, you know, spending around $1.7 billion.

Speaker 6: Great. Thank you.

Ed Schlesinger, Executive Vice President and Chief Financial Officer, Corning: Yeah. Next question, please.

Speaker 7: Our next question will come from George Notter with Wolfe Research. Your line’s open.

Speaker 3: Hi, thanks a lot, guys. Just to continue on that line of questioning. The $1.7 billion, does that include specific CapEx associated with the Meta project? Or is that just... There’s kind of a gross and a net number here, I think, and I guess I’m trying to figure out. I think the basic idea here for you guys is you’re trying to get your customers to pay for more of your capital expansions or capacity expansions, and I guess I’m just trying to figure out, you know, how much of this is ascribed to the customer and how much of this is on Corning? Thanks.

Wendell Weeks, Chairman and Chief Executive Officer, Corning: Yeah. So, as we’ve shared, we use a number of tools to de-risk our investments. Sometimes when we do an upfront payment from a customer, it goes against the capital, and sometimes it actually doesn’t. It may be a refundable down payment that they get through a take-or-pay mechanism or some other mechanism in the contract. We don’t disclose, and we typically don’t disclose the details of any specific agreements, but I can say that for sure, some of the capital we plan to spend in 2026 is for the Meta deal.

Speaker 3: Got it. Okay. And then just one other question. You know, certainly not every major customer. Certainly, you’ll have customers in the optical business that won’t sign contracts like this. I assume that with those other customers, those guys will be looking at price increases. Is that a part of the strategy here? Thanks.

Wendell Weeks, Chairman and Chief Executive Officer, Corning: So first of all, to add on Ed, our plan with that $1.7, we’re integrating, and the cash flows we’re thinking about, we’re integrating all of the various customer agreements we believe that we will complete, and we’re addressing that as thoughtfully as we can. So more to come in that space over time, but that is what we think we’ll invest this year. As far as our other customers, well, for longstanding customers of like our carrier customers, they are not related to these particular product sets, and so we will continue to serve them and serve them in an excellent way. And what we’re seeking here is just to make sure that we have assured revenue streams against any capacity that is dedicated specifically to those customers that are scaling this rapidly.

Ed Schlesinger, Executive Vice President and Chief Financial Officer, Corning: Great. Thank you.

Speaker 8: Next question?

Speaker 7: The next question will come from Steven Fox with Fox Advisors. Your line’s open.

Speaker 8: Hi, good morning. First of all, congrats to Anne. I’m pretty sure you could probably do another 40 years if you wanted to, but, congrats and thanks for all your help. I guess just on everything that was announced around optical, I was wondering if you could fill in the blanks on two things. One is, you seem to be pushing more and more assets towards, U.S., North America production, and I was curious how you feel about international markets for Corning in the coming years. And secondly, Ed, I understand, you know, not changing the operating margin target yet for the company as a whole, but it seems like everything you talked about around optical is pretty positive for optical’s own operating margin.

So, like, maybe you could sort of give us some clues as to how that could influence the overall corporate, corporate average. Thanks.

Wendell Weeks, Chairman and Chief Executive Officer, Corning: Let me start on the first one about the global mix of our sales. We today are about 60% outside the U.S. and about 40% in, and we would expect something in that zone to continue. But what will really drive the location of our factories will tend to be where our customers are, because we seek to locate close to them. So if a lot more gets built in the West, on the AI side, then we would expect to have more of that be here. If on the other side, in the glass side, let’s say, or in our automotive emissions business or any of our other new innovations, more of that were to build in Asia, that’s where we would locate that manufacturing.

And just remember, throughout all of this, what happens to us every year is we’re continuously improving our productivity, which is where we tend to get the product to be able to support ever-increasing revenue. And then if we don’t have a revenue opportunity for that in a specific market, then what we seek to do is develop new markets for that capability, like we did for Gorilla, for display, and then automotive from Gorilla. So that tends to be our approach with the dedication to the locations we build a factory. Ed?

Ed Schlesinger, Executive Vice President and Chief Financial Officer, Corning: Yes, Steve, on margins, you know, I’m gonna step back for a second, then I’ll come to your question. I think when we first created Springboard and launched it, improving our operating margin, our profitability, and our cash generation was such a huge component of the plan because of where we were operating from, our financial profile. We needed to get our returns up, we needed to generate more cash, and we’ve significantly done that. We feel great about it. Optical’s actually been a huge component of that. You know, we’ve been talking specifically about their net income margin over the last year or two, and that’s now at 18%, significantly above where it was when we started this plan. So I think that actually is a good, you know, sort of background for how we think about going forward. So from here forward, I think you’re right.

It is highly likely that our operating margin goes above 20%. Could do that for, you know, periods of time. It could be, you know, nicely above 20%. But we really like the financial profile, and we wanna focus on improving our return on invested capital, and we wanna generate more cash, so we wanna make sure we capture all the growth that we can in this next window of time. So that’s primarily why we’re not putting a new target out. We expect to be at 20% or above 20%, and we expect to grow significantly, and we think that return profile is, is very compelling.

Speaker 8: Great. That’s super helpful. Thank you. Next question?

Speaker 7: Next question will come from Asiya Merchant with Citi. Your line is open.

Speaker 1: Great. Thanks for the question, and congrats again, Anne, on the retirement. You’ll be missed. Wendell, if I may, a question for you on the optical side of things. You’ve talked a lot about, you know, CPO and the scale-up opportunity. So given the growth profile that you guys are talking about here with, you know, additional commitments from hyperscalers, coming forth, can you just remind us, you know, is scale-up included in that outlook through, let’s say, here through 2028? Or are we looking at that opportunity further beyond? Thank you.

Wendell Weeks, Chairman and Chief Executive Officer, Corning: So the straightforward answer, before I give others more color, is we do not have a significant revenue amount for scale-up included in this most recent Springboard upgrade. So that would be on top, depending on your opinion on timing. For those of you who are less close to scale-up, what Asiya is asking about is, because transmitting information with photons is greater than three times lower power usage than using electrons, even in very short links inside switches or servers, and that advantage increases dramatically the longer you want to go or the higher the bit rate can be, 20 times or more.

There is a widespread, deep technical effort going on, to be able to bring more optics into the scale-up piece of the network, closer and closer, to the GPUs and inside of the boxes, closer and closer to the switch ASICs. Though I believe deeply, the innovator in me believes deeply that it is inevitable that those links go to photons, and I also believe that our innovations will play a significant role in those new links. I believe that’s inevitable. Calling timing is more difficult. There are scenarios where the timing would be within, this, the time period between now and 2028. There are scenarios where it will be primarily, starting maybe late 2028 and beyond.

What we seek to do with Springboard is to not over speculate, and if we don’t have really quite compelling evidence of the timing of something as significant and large as the scale of opportunity is, we will tend to view the timeline from a conservative point of view. Does that answer your question?

Speaker 1: Yes, it’s great. Thank you. If I may, one for Ed as well. Ed, you talked a little bit about operating margins for optical or net income margins for optical. Can you just remind us, like within this Springboard, you know, how we should think about margins for the solar business that’s ramping up here and expected to, I think, drive margins which are add or accretive to corporate? So if you can just remind us where we are on that ramp and what it looks like within the updated Springboard. Thank you.

Ed Schlesinger, Executive Vice President and Chief Financial Officer, Corning: Yeah, thanks. So as we’ve shared in Q4 and Q1, we’re expecting sort of a similar, you know, situation is we’re significantly ramping an extremely large factory, and so there’s a drag on our margins, our profit dollars as well. We sized that in the fourth quarter, originally at about $0.03. It was a little more than that. In the first quarter, we expect that to be in the $0.03-$0.05 range. So if you were to take that drag, just the drag part, not even the higher sales, and eliminate that from our financials, clearly our margins would go up. Obviously, our profit dollars would go up, and specifically that would hit, you know, in that Hemlock and emerging innovations segment, which is where we have solar.

I think there’s a nice opportunity for us there to improve margins as we, you know, continue to ramp. We expect sales to go up and our profitability to improve through the year of 2026, and we expect to get this business to the sort of size and scale we would expect it to be, including margins at or above the Corning average by 2028.

Speaker 1: Next question.

Speaker 7: The next question will come from Tim Long with Barclays. Your line is open.

Speaker 9: Thank you. Two, if I could as well. One on the optical side. If you could go back to the carrier piece. You know, just wanna, you know, understand how you’re thinking about this business going forward. I think historically, you know, we’ve seen pretty big cycles here, a few good years and then some catch up, you know, inventory, whatever. But now there’s a lot more data center in that line. So when you think about the carrier business over the next few years, do you think the cyclicality of the business has changed and it’s a little bit more secular? I’d love your thoughts on that. And then second, maybe if we could just touch on display. I think the end’s moved back the last few weeks, but it was getting up there.

So, Ed, if you could just talk on. I get you’re managing to that 25% and $900-$950 of net income. Is there a scenario, and I know you have hedges, where we might need to see more price increases, or where are we with the flow through of the last set of price increases? Thank you.

Ed Schlesinger, Executive Vice President and Chief Financial Officer, Corning: Yes. So on carrier, I’ll start there. In 2025, our business was up about 15%. Majority of that growth was data center interconnect. I certainly see the data center interconnect portion of, or, or the carrier business being driven by data center interconnect spend. That said, I think you’ll see fiber to the home growth, as well. So I do think carrier will grow over the next several years, and we factored in scenarios and how we think of that in our Springboard plan, but probably the largest driver, data center interconnect. Does that answer your question?

Speaker 9: Yeah. Yeah, that’s helpful. Thanks. And then on to Display?

Ed Schlesinger, Executive Vice President and Chief Financial Officer, Corning: Yep, and then on to Display. So, you know, the way I think about Display is our goal is to generate $900 million-$950 million of net income cash out of that business. We did better than that this year. We were, you know, a little higher on income, and our margin % was a little above our target. And we expect to be able to maintain that, and we could certainly be above that at times. You know, we could certainly be above that in 2026. To the extent we need to adjust for a weaker yen than what we have, and we have 120 yen in there, we will do what we need to do on price or otherwise to ensure that we can deliver that level of profitability.

Anne Nicholson, Vice President of Investor Relations, Corning: Thanks, Ed.

Speaker 9: Okay, thank you.

Anne Nicholson, Vice President of Investor Relations, Corning: We’ll take one last question.

Speaker 7: Okay, and our last question comes from John Roberts with Mizuho. Your line is open.

Speaker 4: Congrats as well, Anne. I hope you’re headed someplace warm. What % of bare, bare fiber is currently used internally for cabling? And are you importing any bare fiber into the U.S.?

Wendell Weeks, Chairman and Chief Executive Officer, Corning: I don’t actually know the answer to that question off the top of my head, and everybody’s looking at me like I should. So John, let us take a moment to gather that information, and we’ll chat with you.

Speaker 4: Okay. Thank you.

Anne Nicholson, Vice President of Investor Relations, Corning: Great. Okay, so, just quickly, thank everybody for joining us today. Wanted to let you know before we go that we’re going to attend the Susquehanna Tech Conference on February 27th and the Morgan Stanley Tech Conference on March 3rd. Additionally, we’ll be scheduling management visits to investor offices in select cities. Finally, a web replay of today’s call will be available on our site starting later this morning. So thanks again for joining us and for the well wishes for me. Operator, that concludes our call. Please disconnect all lines.

Speaker 7: Thank you for participating, and you may now disconnect.