Great. Why don't we go ahead and get started? Good afternoon, and welcome to the first day of JPMorgan's 53rd Annual Technology, Media, and Communications Conference. My name is Harlan Sur. I'm the Semiconductor and Semiconductor Capital Equipment Analyst for the firm. Very pleased to have Tim Archer, President and Chief Executive Officer of Lam Research, here with us today. Also have Ram Ganesh, Vice President of Investor Relations. For those of you that don't know, Lam is the third largest semiconductor capital equipment company in the world. Strong leadership in etch deposition with exposure to fast-growing trends like next-generation transistor, memory cell, advanced wiring architectures, and emerging growth opportunities in new materials, resist processing, and advanced packaging. Gentlemen, thank you very much for joining us this afternoon. I'm going to turn it over to Ram for some Safe Harbor statements.
Yeah, thank you, Harlan. I have the wonderful job of reading the Safe Harbor statements. Today's discussion may include forward-looking statements that are subject to risks and uncertainties, and actual results may differ materially. Additional information concerning factors that could cause actual results to differ materially from those forward-looking statements can be found in the risk factors disclosed in our public filings with the SEC, including our most recent 10-K. Thank you. With that, back to you.
Yep. Thank you. Great. I am going to start off with some longer-term questions in the wafer equipment, WFE spending outlook, outperformance of the industry, and outperformance of Lam over the past several years. Tim, wafer equipment spending intensity bottomed in 2013 at about 9%. It has been steadily increasing over the past 11 years. Wafer equipment spending has grown at an 11% CAGR versus the semiconductor industry growth CAGR of 7% over that period of time. Lam has actually grown its revenues at a 14% CAGR over that period of time. Right? At the analyst day, not that long ago, you unveiled a financial target that drives a 13% per year revenue outlook, 18% EPS CAGR through calendar 2028.
Long-term, big picture, like walk us through a high-level framework for driving towards your calendar 2028 target of $25 billion-$27 billion in revenues, 50% gross margins, 34%-35% operating margins, and $6-$7 of earnings power per share.
Great. Thanks, Harlan. It's fantastic to be here. Thanks for highlighting all of the past performance as well as our financial model. Helps me out. You know, we've been very happy with the performance of Lam. I mean, as you mentioned, we've outpaced WFE. I think what we tried to highlight at our investor day, and I think we continue to reiterate, is best is yet to come for Lam. I mean, it's the importance of etch and deposition. When we consider what the technology inflections are that are ahead, we see an opportunity for us to continue to expand our serve market faster than WFE. Within that, through really our engineering efforts and ability to create great products and ability to take share within those expanding markets. You know, from a revenue and top-line perspective, great opportunity for outperformance.
You mentioned our strong financial performance. I mean, just on our most recent earnings call, you know, we highlighted that we delivered the strongest gross margin, highest gross margin since we brought Lam and Novellus together back in 2012. We guided to the highest operating margin for the company since the late 1990s. You know, I think this combination of market tailwinds due to technology changes for etch and deposition, strong product execution, and good operational performance really sets us up very nicely. The reason this is really occurring is, I mean, when you look at the devices and why equipment plays such a stronger role in semiconductors, is manufacturing is just becoming so much more complex. The history of our industry has been one of two-dimensional shrink primarily.
We saw in 3D NAND back in roughly 2015- 2017 timeframe, the industry started to inflect towards vertical scaling. For Lam, that really just changed everything. Obviously, 3D NAND was a huge inflection point for Lam in terms of our ability to take share of the industry spending. Etch and deposition went through a strong period of growth. What we really see ahead of us right now is that similar type of inflection occurring across both the foundry logic space as well as the DRAM space. Again, we're already in the very early stages of those changes today. Looking forward, we see even more of those types of vertical inflections on the roadmap.
Yeah. I think as a follow-on to that, you know, as we move forward in time, we'll talk a little bit more about these dynamics. You talked about, you know, manufacturing architectures moving to more 3D-like architectures. Right?. As we move forward in time, we see this handoff from, you know, memory 3D architectures, especially things like NAND, moving towards 3D architectures in foundry and logic and DRAM. Not coincidentally, I think, you know, the mix of your business, even over the past few years, has gone from 20%-30% foundry logic mix to, over the last couple of years, 50% plus foundry and logic mix. Right?. Much more balance and market exposure, given some of, you know, the share gains in logic and foundry, given some of these new 3D architectures, strong exposure to things like gate all-around, backside power distribution, patterning.
Does the team believe that it can sustain a more balanced mix even if memory WFE comes back strong over the next several years?.
Yeah, Harlan, I would say five or six years ago, you know, we recognized that, you know, while NAND had been this incredible inflection opportunity for the company to really create this strong, sustainable, growing business that we wanted, we had to better balance the company. We'd become overweighted to NAND. In fact, quite often we'd be out, and people talked about us continuously as the memory company. I mean, you know, but when we looked at certain parts of our product portfolio, we saw that we really had the tools and the technology to do dramatically better in foundry logic. We just needed those inflections to start to come to the fore that would allow us to demonstrate that. You know, that's where we are now.
We look at inflections like gate all-around, as you mentioned, the coming inflection with backside power distribution, the advent of advanced packaging in really big ways in foundry logic, as well as DRAM, and the work we've done on dry resist for EUV. You know, when you total those up, almost all of those inflections are primarily focused at foundry logic and DRAM. As we deliver the products and the SAM expansion and the share gains within those spaces, you will see our business naturally balance, even in the face of what we believe will be a recovering NAND market in coming years. The other markets are just growing that much faster. In fact, as we look long-term in our model, you know, we think that foundry logic versus memory ends up being about a 2/3, 1/3 split.
This strong execution and share gain in foundry logic is going to play out even more importantly for us over the coming years.
Let's turn to kind of more of the near term. Right?. I mean, we are still in a cyclical industry. And, you know, there'll be ups and there'll be downs. And, you know, currently, we're going through a lot of trade and tariff-related dynamics. Right. Liberation Day was, you know, just over a month ago, and tariffs on imports into China, you know, were put in place. You know, tariffs on the US got implemented beginning of April. Your customers are facing a myriad of uncertainties. Right?. But certain aspects of their spending are strategic. Right?. Node migration in NAND, for example, certain aspects of their business, especially leading edge, are focused on accelerated compute and AI. Right?. Which faces less spending pullbacks because of the strategic nature of accelerated compute. Certainly, chip design activity at the advanced nodes has been accelerating.
You also have the broader industrial, automotive, consumer-focused smartphone and PC segments of the market that did slow during the 2018, 2019 trade and tariff war. I guess the question is, like, what have you observed over the past few weeks, either discussions with customers and partners, you know, on their six, nine, and 12 month forecasts?. Has anything changed meaningfully?.
You know, we came out on our earnings call recently. We said that, for the most part, we had seen no real changes in our customer plans. I think that, you know, I'd attribute that to a couple of things you just said. I mean, one is that, you know, there's a good portion of the investments by our customers which are very strategic in nature. They're focused on fast-growing elements of the market, parts of the business that they feel they need to be in and investing in. I think that it's not surprising to me that those are not changing. I think also, even on the parts where they may be more impacted by the demand element that you talked about, I think people still are waiting for a bit to see, you know, how that plays out.
I mean, obviously, this is a pretty dynamic environment. The investments and the locations you're picking and the choices you make are long-term investments. I think that that might be another reason why we haven't seen any immediate reaction within our space. We certainly recognize that tariffs have two potential impacts. One is we spoke on our call about direct tariff impact. We said that, you know, Lam has benefited from strategic investments we've made to broaden our geographic footprint of our manufacturing facilities over the years. We have a long-standing strategy of trying to locate close to our customers. As there's been more business in recent years in Asia, a lot of our growth has occurred there. Equally, we have footprint in the U.S. as well.
As we've looked through it, we've said we can't make the direct impact zero. By exercising the flexibility that we have within our manufacturing and supply chain operations, we can lessen the impact. Direct was, in our view, at least manageable and actually incorporated into the guide that we gave for the June quarter. Longer term, I mean, the indirect impact, you know, how the global economy and the long-term demand could be affected by tariffs, obviously, we're not experts in forecasting that impact. I think that's something that has to play out. I think that if you look back to some of the results that you talked about, Lam has performed extremely well from a financial perspective, even in the face of strong cycles in our business.
You know, I think that we've shown flexibility to make the changes needed to protect profitability and come out of each cycle stronger. You know, while we keep a close eye on it, we have those conversations with customers, we also feel like if that were to be the outcome, we would actually come out stronger out of that cycle, next cycle as well.
Yeah. And you just talked about the diversification of your value chain as it relates to servicing your large Asia customers, right?. On the reciprocal tariffs that were levied on many countries, including Malaysia and Taiwan, where you have operations, obviously, there is a 90-day reprieve through early July. But, you know, you have another dynamic, right?. Which is not only are your Asia manufacturing customers getting larger, but there is a lot more U.S. manufacturing being brought back here, right?. The question there is, does the Lam team have enough manufacturing capability in the U.S. to service your leading edge customers that are building plants here, you know, domestically, right?. TSMC, you know, $160 billion plus of investments over the next decade, right?. Samsung has already put a stake in the ground and many others, right?.
If I remember, and you're going to have to support all of these U.S.-based manufacturing operations, I seem to remember before your manufacturing consolidation, the team did have a pretty good manufacturing footprint in Oregon and California. Not sure how that footprint has changed as you brought on your Malaysia and Taiwan factories.
The good news is the company's gotten bigger. We have expanded manufacturing. You know, obviously, a lot of the Asia, the growth has come in those Asia facilities. We still have manufacturing in the U.S. That is why I say I believe that we are extremely well-positioned from a footprint perspective to respond to what needs to be done once it is more clear as to, you know, what the long-term tariff situation is. I think that if you think about servicing these customers, again, coming back to our strategy, we believe that whether it is manufacturing or it is process development or other things, you know, we have a strategy of being close to our customers. As we see our customers shift geographically, we feel we can respond to that.
Let's talk about 2025. You know, back in the April earnings call, the team reiterated their view for $100 billion in industry wafer equipment spending outlook for this year. It's up about 5% year over year. Strength in leading edge foundry and logic, tech upgrades in NAND, strong spend in advanced DRAM and advanced packaging. New technology migration is always a tailwind. Right?. For the Lam team. So, given your visibility, discussions with customers, you know, which of these technology inflections is going to be the biggest growth driver for the Lam team in calendar 2025, you think?.
I'd like to say all of them. But, you know, I think it's important to understand why technology migration is so important for us. As we are, you know, first, as I mentioned in the first answer, etch and deposition is becoming ever more critical. At each technology node, Lam's serve market expands. Also, each of those technology migrations opens up new applications in which there is no existing incumbent player. When we're looking to invest, to expand our market and broaden our portfolio and to take share in those places where we've been historically underweighted, you need the technology migrations to open up those opportunities. Good examples, as we talked about, gate all-around, backside power, advanced packaging, these are really new opportunities. They're new needs for our customers. They require etch and deposition technologies that Lam already possesses.
In some cases, like advanced packaging, where, say, copper plating being one of the key technologies in advanced packaging and also in HBM, this is an area where Lam has been a market leader for 20+ years. In some ways, those tech migrations are not only advancing technology, but those technologies are coming into areas of Lam's traditional strength. You know, I think just from the standpoint of the importance of those inflections and those tech migrations, I think that's just something we watch very closely and feel very good that they are happening.
Given most of these technology transitions across your customer base and in markets, it's still really in the early phases of adoption curve. You know, how are discussions with your customers today, you know, shaping your view on the profile for spending in calendar 2026?
Yeah. For a lot of reasons. You talked about relative uncertainty. It's too early for us to talk about 2026 in a quantitative way. I think that things we can be sure of in 2026 is tech migrations will continue. The NAND upgrade cycle, which is moving some element of the capacity that exists at the 1xx layer to 2xx and beyond, will continue. Obviously, there's a lot of investment being made in technologies like HBM, things that are, and even enterprise SSD, things that are driven by the ongoing build-out of AI infrastructure. When I think about 2026, I mean, it's hard to say exactly how much capacity there will be, what the absolute levels of spending are. Where the spending will occur is very much in the areas that we've focused our product development activities and also our customer engagements.
You know, again, we pride ourselves on being flexible to what the business environment is in any period. What we really want to make sure we get right is the underlying trends. I think when we look at the inflections that are currently underway and how those strengthen through 2026, 2027, 2028, we feel very confident that 2026 will be another year of great progress for Lam, regardless of what the business level is.
March quarter, you know, your domestic China mix came in at about 31%. That's down from about the 38%-40% mix last year. The team has communicated that, you know, China mix is coming down in the second half again. Beyond that, how should we think about a sort of normalized China mix?. Right?. As we think about the team and working to your calendar 2028 targets, what assumptions do you have as it relates to your domestic China mix over time?.
You know, it's, I mean, obviously, many factors go into that answer. I think what's more, in some ways, more important to say is that in that long-term model, the real key for us is growth in areas outside of China at the leading edge. As we just talked about, it's really the inflections that are opening up new markets, allowing us to expand our SAM. You know, I'll just give you an example. If you think about foundry logic, of course, there is trailing edge foundry logic in China. For the most part, our opportunity there is the same as what our opportunity was years ago when those processes were established. The opportunity in leading edge foundry logic for Lam, we talked at our investor day.
We showed that with the inflections coming, like we mentioned, gate all-around and advanced packaging and backside power and dry resist, we have an opportunity where our serve market, from where we are today through the CFED inflection, will actually go up by 2x per wafer. Our serve market will double through those inflections per wafer. You know, again, I think as we execute on those types of opportunities, naturally, China for us becomes a smaller portion of the business simply because our growth vectors in DRAM, our growth vectors in foundry logic and NAND, you know, are all, we think, so much stronger.
One thing I wanted to add was we never explicitly said anything about a second-half China %. What Tim and Doug had said on the earnings call was on an annual basis, 2025 to 2024, China as a percentage will be down.
As the overall mix will be down.
Yeah. We did say, though, there was a $700 million level of business in second half that we saw last year before the restriction that went away, basically, in second half.
Okay. Let's talk about the technology migration dynamics, the detailed dynamics in foundry logic, DRAM, and NAND. Right?. In advanced foundry and logic and DRAM, you're targeting $3 billion plus in gate all-around and advanced packaging revenues this year. First question is, how is that tracking? Right? Second question is, you've got another dynamic, which is backside power distribution. Right?. I understand. I mean, there's a very limited amount of customers that are firing on backside. Rather than giving us a sense of what you think your revenues could be in backside power, just given your strong position there, maybe you can just help quantify, like, what is the opportunity for Lam as more and more customers start to fire on backside power transitions?.
Sure.
Okay. Yeah. These are all important inflections for us. If you think about the first comment you had about gate all-around and advanced packaging, I guess just to level set on what we've said, last year, we said each of those, the shipments to gate all-around nodes and also to advanced packaging were over $1 billion each. We said this year the combined would be over $3 billion. I think we feel very good that we're still tracking to those kinds of numbers. Again, we haven't seen changes in this commitment to invest in technology at the leading edge. And Lam's performance and positions are very strong there. You know, what's still to come are the other two big inflections that we've talked about. One of them is, you just mentioned, backside power.
You know, the way backside power improves power and performance is it puts very thick films interconnect onto the backside of the wafer. Again, when I made this comment about inflections that have very high etch depth intensity, if you think about the steps that are required to deposit and then etch very thick interconnect to the backside, it is very etch and deposition intensive. It also is one of those inflections that moves the technology in the area of Lam's strengths. Lam is a deposition company very strong in productivity, deposition of thick films. We are also the world leader in copper electroplating. Thick electroplated interconnect films play right to our strength. That is an inflection that is still to come. From a product perspective and a positioning perspective, we are already in a very, very good place.
We feel good about that. The last inflection, I do not know if you intend to ask about it, but I feel I have to talk about it, is the dry resist. It is another inflection that affects both the foundry logic business, but also, we reported a recent win in DRAM with that as well. Again, just another opportunity that as the technology becomes more complex, Lam can bring our technology know-how and deposition capabilities to bear on that and deliver something that helps improve EUV patterning for foundry logic. We see that as a growth vector, again, that sort of layers in maybe after backside power. We see through this next multi-year period, kind of inflection after inflection after inflection, layering on top of each other to build our served market and grow our business in foundry.
Yeah. There's been a misconception, right, that your dry resist technology would be prime time in parallel with high NA EUV. I think that, like you said, you already have a win, and one of your DRAM manufacturers is already putting that into production. This is a dynamic that's going to hit and start contributing to the top line even before the adoption curve on high NA.
That's right. We've said that we believe it has cost and performance benefits even before high NA EUV.
Let's turn to NAND. You know, it's interesting because nobody believed the team back in the second half of last year, right, when you called for NAND WFE spend growth in calendar 2025. Right?. And to the team's credit, we're seeing your NAND customers making the move to 200+ layers. Right?. Despite the dynamics in the NAND market, right, customers are pulling back on utilizations. They're slowing their tech migrations. But they are firing on those tech migrations. Right?. Micron is transitioning from their G8 to G9, higher layer count, SanDisk, Kioxia, moving from BICS 6 to BICS 8. Samsung recently, on their earnings call, talked about a more aggressive move to their V9 technology. Right? You have all of these technology layer counts kind of firing.
How long is it going to take, you think, you know, that remaining two-thirds of the current NAND capacity that is installed, that is still at 1xx layers, to move to 2xx layers or higher?. How long is it going to take? Because this is a $40 billion, you know, upgrade opportunity for the team.
Yeah. Thanks for acknowledging that we've been saying it's coming. You know, I think that we certainly, you know, obviously, like, it's beneficial for us. Maybe everybody doubted that, you know, it was really going to come. It is, you know, when we looked, I mean, we gave some statistics on a call earlier in the year that about two-thirds of the industry bits were still being manufactured at the 1xx layer node. Right? Which, you know, again, our comment was not per se about the timing of when that would change, but that over time, there's a necessity to move those bits forward. I think that that's what you're seeing customers now do is upgrade to take advantage of, one, the lower bit cost you get from manufacturing at higher layer counts.
Two, the improved performance you can get from scaling up and using those more advanced device structures. Yeah, we're seeing that. It's hard to predict the rate and pace of the technology upgrades. What we have said is that between now and when the 2xx, the entire install base is upgraded to 2xx, we estimate about $40 billion in upgrade spending to accomplish that transition. We haven't put years on it because obviously, it ultimately depends on the end demand and the consumption of those bits. The technology upgrades have started. I think that, as you know, starting is always the hardest. Once it gets going, I think we'll see a steady progression of upgrade business over the next several years related to those transitions.
One of the key points is you need to, I believe that in general, you need to get bits and devices upgraded to be able to meet some of the more advanced performance requirements, especially when you look at the use of NAND in AI and enterprise. Obviously, enterprise SSDs is one area where there is relatively strong demand for bits. I think that's one of the things that ultimately is driving.
To your point.
Driving the upgrade cycle right now.
To your point, right, it's not just higher layer counts needed for more bits, right, to support this enterprise SSD consumption by AI and accelerated compute. I mean, every new generation of enterprise SSD, you need higher and higher IOPS, right? You need that next generation of technology to drive not only higher density, but better performance dynamics as well.
Yeah. For Lam, when we think about what we can contribute to, you know, the NAND upgrade, you know, in terms of performance, I mean, this is where not only do we benefit from the additional capital intensity from higher layer count, but we also begin to introduce new technologies which have, you know, significant performance benefit for the customers, including the use of molybdenum as the metallization. That change directly helps with the IO performance of the devices and speed, and therefore is a significant improvement for those devices.
One of the big misconceptions I feel like is out in the market and that I think the Lam team doesn't get credit for is, you know, anytime you dominate segments of the market, there's always going to be competitive noise, right? Proof of concept only gets your foot in the door by your competitors. When we talk to the production engineers and fab managers at your customers who are driving the high volume mega fabs, you know, they've got a whole different set of metrics that they're focused on, right? It's not just you have a cryo chamber, XYZ, this and that. No, their metrics are throughput, uniformity, defectivity, smallest footprint, consumables usage, et cetera, right? They tell us that's the reason why they choose Lam.
As you develop these new systems, how does the team integrate the manufacturability requirements of your customers as a part of the development process?. How does the systems development team work closely with your services or what we call your CSBG team?.
Yeah. It's a good question. I mean, you kind of highlighted the holistic nature of what we have to deliver to the customer. Of course, we all love talking about the technology inflection and, you know, whether it's a new material or it's a new device architecture we're enabling. At the end of the day, we have to run tens of thousands or hundreds of thousands and in some cases millions of wafers through those tools. What the customer really values is your ability to do that day in, day out.
That's right.
At a cost and performance and reliability that they can count on. It is informing not only our engineering development cycle. We're spending a lot of time on maturing our tools earlier in the process. We have engineering facilities very close to our customers where we can work side by side with them to make sure that as we go through that pilot phase, we are working out the bugs before it's in their high volume. That has been very beneficial for us. On the services side, we are also engineering new capabilities that we believe will be in the future even more important in high volume manufacturing.
One of those, you know, we've talked about in the past is equipment intelligence, the use of all of the data that's coming off of the machines, predictive algorithms to predict when maintenance needs to be done, help our engineers troubleshoot faster. AI comes into play there, you know, to assist engineers in solving very complex problems on the tools. The other innovation that I'm very excited about is what we're doing in the area of cobots and robotic maintenance on the tools. Obviously, in many cases, as fabs are being built in different parts of the world, labor availability comes up, skilled labor. Also as the technology nodes have moved forward and the sensitivity to just little changes inside the machine really are very important for process performance, this idea of robotic maintenance is really catching on.
Late last year, we introduced and launched the world's first, our industry's first maintenance cobot. What this tool does is it basically can be rolled up to our machine. Instead of an engineer doing the work to do preventative maintenance or corrective maintenance on the tool, the cobot does this work. Yeah. We found a couple of things. One is it helps solve the labor issue. Even more importantly, the cobot is incredibly repeatable at doing these tasks. That has helped us as we look at high volume manufacturing with what is called first-time write. After the maintenance, does the tool come back and qualify first time without additional intervention?. That is a very important metric relative to availability and performance and utilization of the systems.
The process performance, you know, there's some of the parts inside of an etch chamber, for instance, that need to be aligned within a 50 micron tolerance. That's pretty hard for an engineer to do, but a cobot can accomplish that. That gives us better uniformity around the edge of the wafer. These are things that, again, ultimately play into the yield the customer is going to get, the uptime of those tools in production. We think long term, that kind of trust in our productivity and trust in our role as a manufacturing partner is what ultimately causes customers to take us from that step of technology proof to manufacturing implementation.
On the financials, you know, team drove record gross margins of 49% in the March quarter, guide of 49.5% this quarter, long-term target of 50%. Ten years ago, as you mentioned in your opening remarks, you were driving 45%-46% gross margins. Can you walk us through the consistent 400-500 basis point improvement trajectory over the past ten years?. How much of the incremental margin improvement has been due to mix, operational efficiencies, pricing power?. And what is the team focusing on to drive further margin expansion going forward?.
Okay. I won't break it out one by one. What I'll say is that obviously the operational changes we've made have been a key part of that. At the same time, I just talked about the fact that improvements in manufacturing, I mean, obviously, you know, improvements in how we support and maintain the tools affects things like our installation and warranty expenses, which flow into gross margin. Really, we've just become, you know, better across the board. We focused a lot, as we just discussed, on the maturity of the tools at first launch, again, helping us reduce costs that get incurred in the field and affect gross margins. You know, really, we've looked at this problem holistically. We've realized that both things that make the tools more reliable and better for Lam, that benefit our customers, ultimately drive through to our gross margins.
You're seeing that. Second is scale of the company. You know, as the company has gotten bigger, we've been able to invest in our manufacturing facilities, our operations, our warehouses. You know, we're making full use of automation in warehouses of large scale, driving costs down there. We're just looking for every opportunity to improve our efficiency. It is showing up in the margins.
In the same way that the move to manufacturing in Malaysia started off as a headwind, but is now a tailwind, right?. On the digital transformation initiative that you laid out at Analyst Day, you're undertaking that right now. It's a headwind to margins, but expected to be about 100 basis point tailwind to up margins in calendar 2028, 150 basis points tailwind in 2030, right?. How much of this margin uplift is COGS efficiencies versus OpEx efficiencies?.
Yeah. We haven't broken that out, but a lot of it will be operational efficiencies. There's a fair bit of OpEx efficiency that will come in. Really, what we're doing in digital transformation, we're ripping out the systems in the company and replacing those and doing a lot of the process re-engineering that's needed to make ourselves more efficient at scale. You know, one of the things that if there was a silver lining to the big boom in business that came around the COVID period was we were able to identify all of the shortcomings in our systems to operate at a $20 billion+ level. As we mentioned at our investor day, we have aspirations to be a $30 billion+ company in the not so distant future. As we said, we are poised to double the company as our SAM and the WFE grows.
We realized that we needed to invest in systems. That is what we are doing. It is why it is a tailwind. It is a big job to replace all those systems. Just like Malaysia, on the other side of that was a more profitable company, our view is this is a good investment for the company long term. On the other side of this will be operational efficiency at scale that will pay off for the company, our customers, and investors.
Great. Tim, Ram, thank you very much. Appreciate your participation. Thank you.
Thank you.
Thank you, Harlan.
Good job.
Good afternoon, everybody. I'm Sebastiano Petty, and I cover the telecom, cable, and satellite space at JPMorgan. I want to welcome T-Mobile CFO Peter Osvaldik. Peter, thanks for being with us today.
Thanks for having us. It's always fun.
Of course. I think, do you have a safe harbor?
I think they were going to put it up, but to the extent that they, oh, there it is. You know, everybody please look. We'll be making forward-looking statements and referencing non-GAAP metrics. Refer you to our filings for all the associated disclosures.
Awesome. All right. Peter, last fall, T-Mobile outlined an aggressive motor.