To The Moon

$Corning(GLW)$Presentation

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Third Quarter 2026 Earnings Conference Call. Today's conference is being recorded. I will turn the conference over to Chris Keenan.

Christopher Keenan

Thank you, good morning. Welcome to Corning's Q3 2026 Earnings Call. With me are Wendell Weeks and Ed Schlesinger.

Today’s remarks contain forward-looking statements subject to risks and uncertainties that may cause actual results to differ materially, details are in our financial filings. We will mainly discuss non-GAAP core performance metrics. GAAP and core EPS differences are mainly from hedging adjustments and discrete tax items. Reconciliation is available on corning.com. Supporting slides are live on webcast and downloadable. I’ll hand it to Wendell.

Wendell Weeks

Thank you, Chris. We delivered strong Q3 results: sales +19% YoY to $5.1B, EPS +36% YoY to $0.91, above guidance. Gross margin expanded 150bps to 40.5%, operating margin +310bps to 22.7%, ROIC +330bps to 16.7%. We generated $661M free cash flow while investing over $0.5B for capacity expansion.

Q4 guidance: sales ~+19% YoY to $5.2–5.3B, EPS ~+36% YoY to $0.96–1.00.

This performance aligns with our Springboard plan. We updated the plan in May: annualized sales run rate $20B by end-2026, $30B by end-2028, $40B by end-2030. We target 19% CAGR from 2027–2030, up from 15% for the first three years.

Q3 annualized run rate hit $20.3B, Q4 midpoint implies $21B run rate. We have already exceeded the 2026 target only one quarter after upgrading the plan. This call marks the 3-year anniversary of Springboard launch. Over the first three years, sales will grow 60% and EPS over 150%; ROIC nearly doubles and annual free cash flow more than triples.

Our growth relies on long-term customer partnerships with two traits: joint technology co-innovation, and shared risk-reward. Customers commit to volume while we build capacity. We use upfront customer cash deposits to fund capacity; we refund the cash as customers take delivery of committed volumes. This de-risks capital spending and secures customers’ supply chain.

Our “invent, make and serve” model has guided us for 175 years. We build manufacturing platforms for superior cost and quality, and build multi-decade customer partnerships. Ed will share more financial details.

Edward Schlesinger

Thank you, Wendell. Q3 results validate our Springboard acceleration.

Optical Communications: Sales $2.4B (+44% YoY), net income $532M (+80% YoY), record profitability.

Enterprise sales +84% YoY; Gen AI product revenue >100% YoY. Enterprise run rate has quadrupled to $6B. Carrier sales +4% YoY driven by DCI. We signed long-term fiber agreements with Zayo, Verizon and AT&T; DCI opportunity will exceed our prior $1B target.

Glass Innovations: Sales $1.5B (-3% YoY), net income $328M (-10% YoY). Consumer electronics end market weak: TV shipments -4%, notebooks & handhelds ~-20%. Our Apple partnership continues; all iPhone cover glass globally will be made at our Kentucky plant by end-2026. We will raise display glass substrate prices starting Q4 to offset weak yen and rising raw material/energy costs.

Automotive: Sales +4% YoY; North American heavy truck recovery offset weakness in light vehicles.

Solar: Sales $436M (+37% YoY), net loss $7M. Production ramp is slower than expected. U.S. Section 232 trade rules improve pricing and demand for domestic solar products. We target a >$3B solar business with above-corporate-average profitability.

Life Sciences: Sales +1% YoY, outperforming end market.

Q4 guidance is consistent with what Wendell shared.

We continue using customer deposits to share capacity investment risk. Customer deposits (net) were $639M for the first 9 months of 2026. This mechanism smooths cash flow volatility.

Year-to-date free cash flow is $2.3B, CapEx $1.3B. Full-year 2026 CapEx is planned at ~$2B, mostly for optical communications.

Capital allocation priority: first organic high-return growth investment. We maintain a strong balance sheet with average debt maturity over 20 years and no large near-term maturities. Excess cash will mainly return to shareholders via share buybacks.

Key takeaways: Springboard has delivered strong growth and improved financial profile. Q3 results and Q4 outlook confirm growth acceleration. We target $40B sales by 2030, faster EPS growth and expanding free cash flow even with ongoing investment. Back to Chris for Q&A.