Diodes Q1 2025 Earnings Call Transcript

Quartr
Provided by Quartr
May 8, 2025

There are 7 speakers on the call.

Operator

Good afternoon, and welcome to Diodes Incorporated First Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. At the conclusion of today's conference call, instructions will be given for the question and answer session. As a reminder, this conference call is being recorded today, Thursday, 05/08/2025. I would now like to turn the call over to Leanne Sievers of Shelton Group Investor Relations.

Operator

Leanne, please go ahead.

Speaker 1

Good afternoon, and welcome to Diodes' first quarter twenty twenty five financial results conference call. I'm Leanne Sievers, President of Shelton Group, Diodes' Investor Relations firm. Joining us today are Diodes' President, Gary Yu Chief Financial Officer, Brett Whitmire Senior Vice President of Worldwide Sales and Marketing, Emily Yang and Director of Investor Relations, Gurmit Dhaliwal. I'd like to remind our listeners that the results announced today are preliminary as they are subject to the company finalizing its closing procedures and customary quarterly review by the company's independent registered public accounting firm. As such, these results are unaudited and subject to revision until the company files its Form 10 Q for its quarter ended 03/31/2025.

Speaker 1

In addition, management's prepared remarks contain forward looking statements, which are subject to risks and uncertainties, and management may make additional forward looking statements in response to your questions. Therefore, the company claims the protection of the Safe Harbor for forward looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today, and therefore, we refer you to a more detailed discussion of the risks and uncertainties in the company's filings with the Securities and Exchange Commission, including Forms 10 ks and 10 Q. In addition, any projections as to the company's future performance represent management's estimates as of today, 05/08/2025. Dialog assumes no obligation to update these projections in the future as market conditions may or may not change, except to the extent required by applicable law.

Speaker 1

Additionally, the company's press release and management statements during this conference call will include discussions of certain measures and financial information and GAAP and non GAAP terms. Included in the company's press release are definitions and reconciliations of GAAP to non GAAP items, which provide additional details. Also throughout the company's press release and management statements during the conference call, we refer to net income attributable to common stockholders as GAAP net income. For those of you unable to listen to the entire call at this time, a recording will be available via webcast for ninety days in the Investor Relations section of Diodes' website at www.diodes.com. And now I'll turn the call over to Diodes' President, Gary Yu.

Speaker 1

Gary, please go ahead.

Speaker 2

Welcome, everyone, and thank you for joining us on today's conference call. As announced in our press release earlier today, we delivered another quarter of year over year growth, achieving a 10% increase as the recovery in our target end markets continued to improve. First quarter revenue exceeded our expectation due to better than seasonal performance in the computing market in Asia, primarily driven by increasing opportunity for Diodes product in AI related applications. Additionally, we are seeing improving market condition in Europe and North America, as those regions have begun to show sign of rebounding from recent lows. Our automotive and industrial market totaled 42% of first quarter product revenue, as we continue to see expanding automotive content and the design opportunities.

Speaker 2

Another notable indication of improving conditions is channel inventory dollars and the days have continued to decrease and appear to be more aligned with real demand and the historical POS levels. Although the inventory depletion is a positive sign for Diodes and the broader market, the reduction in channel and internal inventory, combined with the absorbing the Chinese New Year holiday temporarily limited increased loading at our manufacturing facility and therefore gross margins. As channel inventory continues to normalize and the global demand improves, we should see a more material expansion to gross margin in future quarters. Additionally, qualifying more product in our internal facility to increase loading, combined with recovery in our higher margin automotive and industrial markets, will also contribute to driving future margin improvement. As further evidence of increasing momentum, we are guiding for the third consecutive quarter of year over year growth and with second quarter also expect to be the first quarter of both year over year and the sequential growth in this recovery cycle.

Speaker 2

Even though the global market remain dynamic, especially with the recent tariff, BIOS is strategically positioned to meet global customers' need with our hybrid manufacturing model and internal facility located across The U. S, China, Taiwan and The UK. One final comment before turning the call over to Brad. As you may have seen, we also announced today a $100,000,000 stock repurchase program, which further reiterate our confidence in the business and the future growth prospects. Dow is in a unique position with our strong cash flow generation and a healthy balance sheet to continue investing both organically and in MMA, while also returning capital to stockholders through this share buyback.

Speaker 2

With that, let me now turn the call over to Brett to discuss our first quarter twenty twenty five financial results as well as second quarter guidance in more detail.

Speaker 3

Thanks, Gary. Good afternoon, everyone. Revenue for the first quarter twenty twenty five was $332,100,000 compared to $3.00 $2,000,000 in the first quarter twenty twenty four and three hundred and thirty nine point three million dollars in the fourth quarter twenty twenty four. Gross profit for the first quarter was $104,700,000 or 31.5% of revenue compared to $99,600,000 or 33% of revenue in the prior year quarter and $110,900,000 or 32.7% of revenue in the prior quarter. GAAP operating expenses for the first quarter were $103,400,000 or 31.1% of revenue, and on a non GAAP basis were $97,100,000 or 29.3% of revenue, which excludes $5,800,000 amortization of acquisition related intangible asset expenses, dollars 300,000.0 in restructuring charges, a $200,000 in acquisition related costs.

Speaker 3

This compares to GAAP operating expenses in the first quarter of twenty twenty four of $86,600,000 or 28.7% of revenue and $99,000,000 or 29.2 percent of revenue in the prior quarter. Non GAAP operating expenses in the prior quarter were $95,500,000 or 28.1% of revenue. Total other expense amounted to approximately $4,100,000 for the quarter, consisting of a $5,800,000 impairment of an equity investment, dollars 4,000,000 in unrealized losses from investments, dollars 500,000.0 in interest expense, dollars 200,000.0 of foreign currency losses and $5,800,000 of interest income and $600,000 in other income. Losses before taxes and non controlling interest in the first quarter twenty twenty five was $2,800,000 compared to income of $18,800,000 in the prior year period and income of $12,300,000 in the previous quarter. Income taxes in the quarter were $20,000 primarily as a result of the geographical mix of pretax income and loss across tax jurisdictions.

Speaker 3

We expect the tax rate for the full year to be approximately 18% plus or minus 3%. GAAP net loss for the first quarter was 4,400,000 or a loss per share of $0.10 compared to net income of $14,000,000 or $0.30 per diluted share in the prior year quarter and net income of $8,200,000 or $0.18 per diluted share last quarter. The share count used to compute GAAP loss per share for the first quarter twenty twenty five was 46,400,000.0 shares. Non GAAP adjusted net income in the first quarter was $8,800,000 or $0.19 per diluted share, which excluded net of tax $4,800,000 for amortization of acquisition related intangible assets, 4,800,000.0 for impairment of an equity investment, 3,200,000.0 non cash mark to market investment value adjustment, 200,000.0 restructuring charges, and $100,000 of acquisition related costs. This compares to non GAAP adjusted net income of $13,000,000 or $0.28 per diluted share in the first quarter twenty twenty four and $12,500,000 or $0.27 per diluted share in the prior quarter.

Speaker 3

Excluding non cash share based compensation expense of $5,000,000 for the first quarter, net of tax, both GAAP net loss and non GAAP adjusted net income would have increased by $0.11 per share. EBITDA for the first quarter was $26,200,000 or 7.9% of revenue compared to $48,300,000 or 16% of revenue in the prior year period and $40,700,000 or 12% of revenue in the prior quarter. We have included in our earnings release a reconciliation of GAAP net income to non GAAP adjusted net income and GAAP net income to EBITDA, which provides additional details. Cash flow provided by operations was $56,700,000 for the first quarter. Free cash flow was $40,800,000 which included $15,900,000 of capital expenditures, net cash flow was a positive $26,200,000 Turning to the balance sheet.

Speaker 3

At the end of first quarter, cash, cash equivalents, restricted cash plus short term investments totaled approximately $349,000,000 Working capital was approximately $868,000,000 and total debt, including long term and short term, was approximately $52,000,000 In terms of inventory at the end of the first quarter, total inventory days were approximately 187 as compared to 193 last quarter. Finished goods inventory days were 80 compared to 82 last quarter. Total inventory dollars decreased $3,900,000 from the prior quarter to $471,000,000 Total inventory in the quarter consisted of a $5,200,000 decrease in finished goods, a $1,200,000 increase in raw materials and a $49,000 increase in work in process. Capital expenditures on a cash basis were $15,900,000 for the first quarter or 4.8% of revenue, which was at the low end of our targeted range of 5% to 9% of revenue. Now turning to our outlook.

Speaker 3

For the second quarter twenty twenty five, we expect revenue to increase to approximately $355,000,000 plus or minus 3%, representing 11% growth over the prior year period at the midpoint, which will be the third consecutive quarter of year over year growth. GAAP gross margin is expected to be 31.8% plus or minus 1%. Non GAAP operating expenses, which are GAAP operating expenses adjusted for amortization of acquisition related intangible assets are expected to be approximately 28 of revenue, plus or minus 1%. We expect net interest income to be approximately $1,500,000 Our income tax rate is expected to be 18% plus or minus 3% and shares used to calculate EPS for the second quarter are anticipated to be approximately 46,400,000.0 Not included in these non GAAP estimates is amortization of $4,800,000 after tax for previous acquisitions. With that said, I will now turn the call over to Emily Yang.

Speaker 4

Thank you, Brett, and good afternoon. As Brett and Gary mentioned, revenue in the first quarter was above our original expectations and represented 10% growth over the prior year period and down 2.1% sequentially, which is better than the typical seasonality. Our global POS increased in the quarter, and our channel inventory was lower in terms of both dollars and weeks. Looking at global sales in the first quarter, Asia represented 78% of the revenue, Europe 13 Percent and North America 9 Percent. We are seeing improvements across all regions with a higher book to bill ratio and a stronger beginning backlog going into the second quarter.

Speaker 4

In terms of our end markets, industrial was 23% of Diodes product revenue automotive, 19% computing, 27% consumer, 17% and communication, 14% of the product revenue. Our automotive industrial revenue combined totaled 42%, which is comparable to the last quarter. Our ability to maintain this level of revenue as this end market undergo inventory and demand adjustments reflects the success of our path and ongoing content expansion and design win initiatives. Let me now review the end markets in greater detail. Starting with automotive market, we maintained product revenue at 19% and are seeing the overstock situation continue to improve.

Speaker 4

We see some demand recovery, but visibility is still limited. Our focus remains on the content expansion and market share gain to position Diodes for the growth as the auto market recovers. In terms of our demand creation, momentum remains strong throughout the quarter with expanding design ins and design wins across all focus areas, including connected driving, comfort style safety and electrification. Several examples include our SBR product with several designs in ADAS and automotive panel applications, while our buck converters, newly released MOSFET, silicon carbide MOSFET, and 400 volt TVS product were designed into DCDC, onboard charging, and EV charging applications. Additionally, our low IQ LDO family and high current LDOs receive solid demand for always on MCU power supply and wireless charging applications.

Speaker 4

We're also seeing rapid adoption of our small link on PCI Express packet switches, USB Type C redrivers, and active crossbar MUXes for real C entertainment and smart Copic applications. Our bidirectional TVS diodes are also being designed into Copic T box applications, while our high power rated TVS product are being designed into several automotive applications. Additionally, our dual line CAN bus protector have been selected for the protection in the battery managed system applications, and our five volt overcurrent protection switches saw solid demand for electronic control unit systems. Also in the auto market, we extended the strong design in momentum for our linear LED drivers and multimode controllers being used in rear and backup lighting and headlight applications. Our CMOS crystal oscillator and spread spectrum crystal oscillators are seeing traction in image sensor reference clock driven by higher data rate for sensor resolution.

Speaker 4

Turning to industrial market. The inventory correction continues similar to the automotive market, although we are seeing some signs of improvement at certain end customers. Overall demand is still slow to recover. Visibility is also limited in the industrial market, and we are seeing more short lead time orders. Despite the slow demand recovery, we continue to make progress and gain design momentum across a number of products and applications.

Speaker 4

Our silicon carbide diodes and MOSFETs have been winning designs in eight fifty volt PC power supplies and elevator power applications, while our bridge rectifiers are being designed into switching power supplies for telecom, desktop and server applications and power delivery adapters. Also in the industrial market, our buck converters are winning designs for industrial gate drivers and oven control applications. And our wide wing LDO saw solid demand for fans, power tools and e meter applications. We're also securing strong design wins for our linear LED drivers in traffic and transportation science. Our bidirectional TVS product has several design wins for interface, IO, and battery management system cell protection in multiple industrial applications.

Speaker 4

Additionally, our contact image sensor product for AOI are being utilized in battery film inspection, glass and printing measurements, panel inspections, barcode printers, as well as check scanner applications. In the computing end market, our ongoing design momentum in the AI server and data center applications continue to be a key highlight for Diodes in the quarter. We secured wins for our newly released PCI Express six point zero clock generators and clock moxus buffers, as well as PCI Express packet switches to expand the CPU's IO requirements, as well as BMC controllers, USB host controllers, security encryption processors, and MCIO cables. Also for the AI surfers and high speed data applications, our SBR products have been increasing design ins, while our crystal oscillators are gaining traction in optical modules for faster data rate and our ultra low jitter crystal oscillators are seeing traction in smart network interface cars. Within the broader computing market, demand remains solid for diodes bus switches in enterprise SSD applications, and our eUSB2 repeater solutions has become the standard interface for CPUs and SoC processors.

Speaker 4

Additionally, our MEPD5 redrivers are being used in laptop PC camera applications to enable a higher bandwidth camera interface. And our newly introduced MOS FET are seeing traction for DC to DC power converter applications in server and laptops, while our PCI Express five point zero clock generators and protection devices are being designed into docking station applications. In the consumer market, we are gaining design win tractions with our SBR and TVS products for ACDC power supplies for TVs, printers, gaming adapters and chargers applications. And our protection devices are being adopted in brushless DC fans and air conditioning applications for smart home appliances. Also in the consumer, our bus switches solution enjoys steady revenue for SSDs and next generation portable gaming console applications.

Speaker 4

And our five volt overcurrent protection switches receive strong demand for physical interface power ports, such as USB and HDMI. Additionally, Diodes newly released level shifter product family also achieved design wins in applications such as PC memory, smartwatches, and other computer applications. Lastly, in the communication market, Diodes ESC protection products are winning designs in smartphone camera applications with AI features, while our MOSFETs are being designed into mobile phones for battery management applications. We're also seeing traction in five gs applications for our protection devices. Additionally, our ultra low jitter crystal oscillators are being utilized in gigabit switches and optical modules for AI networking and data center applications.

Speaker 4

One final comment, the recent U. S.-China tariff increases and related impact remain a very dynamic situation, especially the potential effect on our customers. We are working closely with our customers to monitor the situation, while also reviewing the potential exposure across our products. C Styles has multiple manufacturing facilities located around the globe, and many parts are alternative manufacturer flow qualified, we anticipate a material impact. Additionally, our hybrid manufacturing model provide us with the flexibility to adjust our capacity planning between internal and external, as well as supply chain arrangements, thereby mitigating the cost impact related to the trade tariffs.

Speaker 4

In summary, as evidenced by our comments today, our business is gaining increasing momentum with achievements of consecutive quarters of year over year growth. Additionally, our overall inventory has continued to improve and are positioned us to benefit from a broadening recovery of demand across our end markets. And although the current tariffs create economic uncertainty, Diodes' hybrid model and global manufacturing footprint enable us to strategically meet the needs of our customers. We remain highly optimistic about our growth perspective in 2025 and beyond. With that, we now open the floor to questions.

Speaker 4

Operator?

Operator

Thank you. We will now begin the question and answer session. And your first question today will come from David Williams with Benchmark. Please go ahead.

Speaker 5

Hey, good afternoon, everyone, and congratulations on the solid execution here.

Speaker 2

Thank you. Thank you, David.

Speaker 5

Yes. So I guess my first question is really through earnings season, it's been pretty clear that demand has been better than anticipated. And as you kind of think through that, I'm curious if you were seeing any demand pull forward, just given where inventory levels were, we had largely tried to digest those and then lead times have gotten pretty short. And then now we have the tariff situation. So it feels like there could be some pull in here.

Speaker 5

You think, at least we have to think there's some demand destruction that is ongoing. So I guess how do you square that with just the momentum that you have in the business? And is there anything you would point to that kind of gives you more confidence, that the, in the stability of the demand that you're seeing today?

Speaker 4

Yes. David, this is Emily, right? So definitely, tariffs created uncertainty, especially on the end demand with our customers. So the only thing we can do is actually work very closely with the customers and watching the situation, to really kind of understand the longer term impact from the business side. I think regarding pooling, to be honest with you, we don't really see a lot of pooling activities.

Speaker 4

But I think of the other angle, if you look at the channel inventory, it definitely depleted more, right? I talk about POS increase as well as channel inventories in terms of weeks, also in terms of dollars, both decreases. So this is all positive signs, right? So on the other hand, if I look at the backlog, if I look at a book to bill ratio, they all improved. I think from the actual business point of view, I also talk about automotive, industrial, we're definitely seeing the inventory improvement.

Speaker 4

Overall, we're definitely seeing more of the activity going through as well as POS increase, right? So I think all of these are positive signs, that we're definitely going through a recovering period. So I think that's pretty much what we've seen so far.

Speaker 5

Great. Appreciate the color there. And I know you all are really close to your customers, so I think your insight is helpful. Secondly, I guess, just as you think about your manufacturing footprint and you've had an ongoing strategy to really report internal versus external. Does any of this tariff situation, does that change that strategy or maybe the pace at which you try to bring some of that stuff internal so you have greater flexibility?

Speaker 5

Or how do you think about that maybe?

Speaker 2

Yes. Actually, David, this is Gary. Let me help answer this question here, right? As you know, we manage our hybrid manufacturing model very well through the past few years. And then we will continue to drive to porting our external our product from external to our internal wafer fab.

Speaker 2

This will no change at all. And actually, we are doing very well and we do see quite a few good milestone to qualify our process and product in our internal wafer fab facility. And also, we do see our external customers do qualify our product and start to receiving those PO from those key customers in several key segments. So this will be the direction from Diodes continue to doing that regardless of the tariff issue. But the good advantage for Diodes, you know, we don't have so much tariff impacts because of the hybrid manufacturing model, as well as our footprint across the three different regions, right?

Speaker 2

It's really kind of not focused only on one region, and it would be very easy to tell my customer, we can easily have second source in the different kind of region and to supply customer need. So that's why we so called the flexibility to support the customer need it, right? So as Emily mentioned about it, we don't really see a lot of, you know, pulling because our device product is kind of flexible, But we do see the customer request us to replace maybe somebody else and we are very easy can catch that up and support their demand.

Speaker 4

Yes. So I think if you look at the overall supply change, change a lot, right, from globalization to regionalization to maybe country lization, wherever you want to call it, we believe we actually have a good structure in place, both front end and back end, to really support wherever the need or the future change requirement will be.

Speaker 5

Okay. Perfect. And then just one last one for me, you don't mind.

Speaker 2

Just kind of

Speaker 5

on the AI CapEx trends, those are clearly moving in the right direction. You have some nice exposure there, I believe. Can you talk maybe about where you're seeing that demand regionally? And then if there's maybe any shifts in terms of that AI CapEx? Or just any color around that those trends, I think, would also be helpful.

Speaker 4

Yes. So I think we have to probably look at the AIs in different portions, right? The one we're actually seeing with actual ramping up demands ongoing with a lot of new designs is really more on the hyperscalers doing the more data center areas, right? What we've seen, that's still ongoing. Here and there, there's a little bit up and down, but all in all, this is really positive, especially with the pipeline expanding more customers with the newer designs, and we'll be ramping up more.

Speaker 4

I think on the other areas, really on the edge computing side, we're also seeing a lot of new opportunities that really working down from hyperscaler to the next level. I think that's actually going to be an even bigger opportunity for Diodes overall, because that's going to consume a lot of different board sizes and different applications and different customer base. So I would say, all in all, we're still seeing the beginning of the ramp. We didn't really see significant adjust from the CapEx expansion point of view, what we've seen really more on the positive side. The other thing we've been focused talking about really on the content expansion, right?

Speaker 4

So, if you look at compare AI server versus a regular server, you can actually increase from $68 to $90 some. So that will continue to be the focus overall for Diodes, in the future.

Operator

Your next question today will come from Tristan Tera with Baird. Please go ahead.

Speaker 6

Hi, good afternoon. Could you talk about the gross margin catalyst that you see in the second half or any potential headwinds? You've talked in your prepared remarks about some acceleration potentially in gross margin. And I know that contractually, you have opportunities in the second half to increase in sourcing versus what you're currently doing with outside fabs. So how should we look at all of this in terms of gross margin direction and perhaps quantifying kind of the key factors, including utilization rates in terms of their contribution to gross margin expansion?

Speaker 4

Yes. So Tristan, this is Emily. Let me walk you through the margin impact currently what we're seeing, right? So the manufacturing surface agreement, the loading definitely lower than our expectation. And then if you look at the overall inventory build, if we compare the Q1 with the Chinese New Year versus last year, as evidenced that our internal inventory decrease as well as the channel inventory decrease, right?

Speaker 4

So this is all the signs that we are actually adjusting some of the inventory build and also because of Chinese New Year, right? On the other hand, I think it's normal. We've been talking about price pressure, 1% to 2%. We definitely see some from there, but still within our normal range. So I would say that's pretty stable.

Speaker 4

So I think all in all, you're getting pressures in different areas. So what we're actually doing is actually, like you said, we will continue to push the internal loading, portings, loadings, as well as qualification of the product. But I want to be really honest with you because the economy situation, the customer approving the change product change notice is definitely a little bit longer than what we expected. But overall, progress is really good. So that's going to continue to drive some of the margin improvement in the second half.

Speaker 4

We also expect second half revenue growth, and that will also increase some of the loadings to minimize some of the underloading costs, right? At the same time, we will continue to drive the manufacturing costs down together with the product mix improvement initiative with a new product introduction, replacing some of the old product with newer product, focus on auto industrial, the Pericom product as well as analog power discrete. So this will continue to be the focus. With everything combined together, we are confident that we will see margin improvement throughout the next few quarters.

Speaker 6

Great. And then

Speaker 1

yeah. Go ahead.

Speaker 6

Yeah. So for my second question, and I don't know, Gary, if you wanted to add on to my question That's all Yeah. So we're going to see probably some of your peers on loading capacity, 150 millimeter of analog capacity in The US, possibly worldwide as some of your peers have clearly excess capacity. Does that present opportunities for you to get assets at a good price toward your medium term revenue goal? Or would you say adding capacity near term is not on the table given the current macro?

Speaker 2

Well, I would say that, you know, Tristan, you know, I would do believe, you know, our capacity currently is coming stable, right, and especially on the utilization, as Emily mentioned about, but I do believe that this year is going to be the great year for dialysis. All utilization is going to get improved. However, even though you see the first quarter, second quarter utilization compared to like second half could be lower, but our product mix could be some utilization were 100% loaded and that's why I will not stop investing any CapEx to expand our capacity to support customer need it. At the same time, I will try to do our best to make sure our internal capacity more efficient way to being used and our consolidated capacity into the capacity which we still have a very high demand or shortly time request coming in to support customer need. So I would say that, yes, I will do now I will continue to put a CapEx into the capacity, which is very, very, you know, hot at this moment, but also at the same time, I'm going to reduce capacity, especially for those like commodity stuff, you know, consolidate into the capacity where we need it.

Speaker 2

So, we just need to make sure we use our capacity utilization very, very carefully at this moment. Okay, made the right investment is what we want to do. Yeah, Tristan, I

Speaker 3

think one thing to think about would be that the some of the excess capacity that others may make available, we see that disruption as maybe opportunities in our top line versus necessarily thinking we need to increase our manufacturing footprint right now. Especially, we're doing very well on our hybrid model, right? Because, you know, if there's really some capacity, you know, is we don't really want

Speaker 2

to invest probably those low end commodity, we can always go to the subcomp.

Speaker 6

Okay. That's very useful. And then just a very quick one. Have, disty inventories normalized within your target range? I know it's improving, but is it now at level you're comfortable with?

Speaker 6

Or is there a bit more progress, to get to those targeted levels?

Speaker 4

So we define the normal range eleven to fourteen weeks. Right now, the inventory is still slightly higher than that. But if we look at the market outlook without the tariff consideration, right, remove that, we definitely expect the second half will be a growth compared to the first half. So with that situation in place, we're actually pretty comfortable with the inventory level that we have in the channel really supporting the targeted growth coming.

Operator

Because the rest

Speaker 3

of the week's calculation is backward looking. And as we look at it, we really feel like what we've done to get the right mix in the channel is quite good. And so we're pretty we're in a we feel like we're in a good place to drive growth and have good availability.

Speaker 2

Right. And the most recent, think all you know, short lead time PO is going up a lot, which means like that customer try to change their build location dynamically, right, just due to the tariff issue. So we will make sure you know, have the inventory available even the WIP available to cover the customer urgent needed and no matter where it is.

Speaker 6

Great. Thank you very much.

Speaker 2

Thank you, Tristan.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Gary Yu for any closing remarks.

Speaker 2

Thank you, everyone, for participating on today's call. We look forward to reporting our progress on next quarter's conference call. Operator, you may now disconnect.

Operator

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Powered by Quartr

Key Takeaways

  • Diodes delivered another quarter of 10% year-over-year revenue growth to $332.1 million, driven by stronger-than-seasonal computing sales in Asia—particularly in AI-related applications—and improving markets in Europe and North America.
  • The automotive and industrial end markets accounted for 42% of Q1 revenue, supported by expanding content and a robust pipeline of design wins in ADAS, power management, LED lighting and industrial power supplies.
  • Channel inventory declined in both dollars and days to levels aligned with point-of-sale, setting the stage for a third consecutive quarter of year-over-year growth and the first sequential increase in this recovery cycle—Q2 revenue is guided to ~$355 million (±3%).
  • Q1 gross margin of 31.5% was pressured by lower internal fab loading around Chinese New Year and inventory adjustments, but management anticipates material margin expansion as internal utilization improves and higher-margin markets recover.
  • Diodes announced a $100 million stock repurchase program, reflecting confidence in future growth and underpinned by strong free cash flow of $40.8 million and a healthy balance sheet with ~$349 million in cash versus $52 million in debt.
AI Generated. May Contain Errors.
Earnings Conference Call
Diodes Q1 2025
00:00 / 00:00