Rogers Corporation Q1 FY2026 earnings call

• First quarter delivered solid results with all financial metrics meeting or exceeding the midpoint of guidance for the third consecutive quarter. - Second quarter sales forecasted to increase 6% at midpoint of guidance, with adjusted EBITDA margins projected to increase nearly 600 basis points year over year. - Secured important design wins in Q1, including in AES business for automotive radar application and in EMS business for EV battery applications. - Progress in R&D pipeline, including testing micro channel cooler technology for data centers and ongoing development of high frequency circuit material for data centers. - Continuing with 2026 profitability improvement initiatives, restructuring at German facility underway with annualized savings expected. - Capital allocation priorities support organic and inorganic growth, with focus on evaluating potential M&A and allocating capital for CapEx as needed.

In the first quarter, sales were $201 million, a 5% year - over - year increase. The industrial market, at 37% of sales, saw double - digit sales growth in Q1. The automotive market, representing 24% of revenue in Q1, had sales decline year over year at a high single - digit rate but positive design wind momentum. The electronic and communications market, accounting for 18% of sales in Q1, increased at a double - digit rate. Aerospace and defense sales, comprising 15% of revenues, improved slightly from last year.

• Q2 revenues guided to be between $210 and $220 million, midpoint 6% increase year over year. - Gross margin gauged in range of 32.5% - 33.5%, midpoint 140 basis points higher than prior year. - Adjusted EPS forecast to range from $0.90 to $1.10. - Adjusted EBITDA anticipated to range from $35 to $41 million, midpoint 17.7% EBITDA margin, 590 basis points improvement vs Q2 2025. - Non - GAAP full - year tax rate projected at approximately 30%.

• Uncertainties such as economic conditions, market demands, and competitive factors could cause actual results to differ materially from forward - looking statements. - Adverse weather conditions and multiple supplier disruptions impacted operations at some U.S. plants in Q1, which could potentially affect future performance.

Q: Craig Ellis from B - Reilly Securities asked about design wins in EB and ADAS and revenue conversion, and data center opportunity.

A: Regarding design wins, majority of wins in EMS related to EV batteries and in AES for radar application with Asian OEM will be in production from Q2 - Q4 2026. For data center, revenue in 2026 will be mostly sampling or prototype type, with opportunities in microchannels and high - speed digital product lines, likely Q3 - Q4 2027.

Q: Craig Ellis followed up with Laura on sequential gross margin strength.

A: Margin is a function of volume, COGS management initiatives, structural changes in segments, with initiatives to minimize yield loss and optimize input costs continuing.

Q: Daniel Moore from CGS Securities asked about industrial end markets.

A: Industrial segment growing, with growth from general economy, semiconductor growth, and recapturing market share.

Q: Daniel Moore followed up on data center opportunity revenue and TAM.

A: Revenue and potential discussed later this year, opportunity is mix of complementary and solving thermal management issues, technology more specific, efficient, and cost - effective.

Q: Daniel Moore asked about revenue slipped from Q1 due to weather and supply disruptions and guide for Q2.

A: Weather and supply disruptions caused Q1 sales to slip, without which would have trended towards high end of guidance.

Q: David Silver from Freedom Capital Markets asked about cost - saving targets.

A: Savings in 2025 were $32 million, with additional $7 million to be realized through P&L and incremental $13 million from German facility restructuring to reach cumulative savings of $45 million.

Q: David Silver asked about major OEM customers and growth.

A: Automotive market impacted by regulations in U.S. and Europe, but recovering, EV market in China to turn positive, other markets like electronics showing growth.

Q: David Silver asked about capital expenditure budget.

A: Midpoint $35 million, largely for maintaining facilities, automating, and making auxiliary systems efficient, with focus on potential return on growth - oriented CapEx.

Q: Daniel Moore from CGS Securities asked about aerospace and defense outlook since Iran war.

A: Outlook not changed, expected to continue growth with restocking expected in Q2, Q3 and beyond.

Q: Craig Ellis from B Reilly Securities asked about capacity and customer order behavior.

A: Rogers has sufficient capacity for current business demand, with local for local strategy playing role, and pricing market - driven, trying to mitigate cost increases internally first.