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Unidentified Company Representative Hello. Welcome to the ASUS Quarter 4 2024 Online Investor Conference. Today's conference will be held by ASUSTeK Computer co-CEO, S. Y. Hsu; and Samson Hu, alongside CFO, Nick Wu. The conference will be divided to 2 parts. In the first part, CFO, Nick Wu, will start by outlining our quarter 3 financial results. Next, our 2 co-CEOs will go over the operational strategies and business outlook for ASUS. For the second part, we will be conducting a Q&A. You are welcome to rai ...

Financial Data and Key Metrics Changes - Revenue for Q3 2024 reached TWD156.7 billion, a quarter-over-quarter increase of 15% and a year-over-year increase of 24% [3] - Operating profit was TWD11.1 billion, up 4% from the previous quarter and 32% from last year [4] - Net income after tax was TWD12.5 billion, representing a quarterly growth of 6% and an annual growth of 13% [4] - Earnings per share for Q3 were TWD16.8, with a gross margin of 17.1% and an operating margin of 7.1% [4] Business Line Data and Key Metrics Changes - The System Business Group accounted for 64% of revenue, the Open Platform Business Group 34%, and the AIoT Business Group 2% [10] - The System Business Group recorded a year-over-year revenue growth of 15% to 20% in Q3 [29] - The Open Platform Business Group saw revenue growth of 35% to 40% year-over-year, with AI server sales achieving several fold year-on-year growth [32] - The AIoT Business Group achieved a 150% year-on-year revenue increase, driven by the NUC product line [34] Market Data and Key Metrics Changes - Asia contributed 48% to revenue, Europe 29%, and the Americas 23% [10] - The China market significantly drove growth in Q3, supported by government economic stimulus and consumer subsidies [6] - ASUS gaming PC market share grew 20% year-over-year, reaching an overall market share of 30% [27] Company Strategy and Development Direction - ASUS aims to transform into a full-spectrum AI company, leveraging generative AI as a core strategy for growth [20] - The company plans to expand investments in gaming and Copilot+ PC segments to solidify long-term strengths [12] - ASUS is focusing on enhancing its competitive edge in the commercial sector while maintaining strong performance in the consumer segment [24] Management's Comments on Operating Environment and Future Outlook - Management expects Q4 demand to be relatively uncertain, with a cautious approach to inventory and operational management [11] - The company anticipates a new growth cycle driven by AI, with plans to launch several AI platforms and solutions [19] - For Q4, ASUS expects PCE product revenue to decrease by about 15% sequentially but still achieve a 20% year-on-year growth [15] Other Important Information - Non-operating income totaled around TWD4.05 billion, including investment income and foreign exchange gains [8] - Net inventory decreased from TWD145.3 billion last quarter to TWD138.6 billion this quarter [9] Q&A Session Summary Question: What are the expectations for operating and gross margins in Q4? - Management expects gross margins to adjust downward due to seasonal changes in product cycles, while operating margins are projected to match long-term targets of 4% to 5% [40][41] Question: What percentage does the Server Business Group account for, and how much does AI server contribute? - AI servers account for about 80% of the Server Business Group sales, with expectations for continuous growth [43] Question: When will the GB200 servers be shipped, and what are the profitability expectations? - Shipments for GB200 servers are expected to increase by Q1 2025, depending on chip supply from NVIDIA [45] Question: How is ASUS performing in the gaming and commercial PCs across different regions? - The China market has shown the highest performance, driven by popular game titles and government subsidies [46][47] Question: What are the prospects for commercial PCs in 2025? - Factors such as the end-of-life status of Windows 10 and the need to replace work-from-home PCs are expected to drive sales [48] Question: Will ASUS consider mergers to promote growth in its server business? - ASUS is open to mergers but is also investing in R&D capabilities for the server market [50][51] Question: What are the expectations for the PC market in 2025? - The PC market is expected to grow between 3% to 5%, with AI PCs potentially reaching a market penetration rate of 20% to 30% [57][59]

ASUSTeK 3Q 2024 Investor Conference Disclaimer 2 ASUSTeK's presentation contains forward-looking statements subject to significant risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements. The forward-looking statements in this release reflect the current belief of ASUS as of the date of this release, we undertake no obligation to update these forward-looking statements for new information, future events, or otherwise. CONFIDENTIAL AND PROPRIETARY ...

ASUSTeK Computer Inc. (OTCPK:ASUUY) Q3 2023 Earnings Conference Call November 13, 2023 3:00 AM ET Company Participants S.Y. Hsu - Co-Chief Executive Officer Samson Hu - Co-Chief Executive Officer Nick Wu - Chief Financial Officer Operator Hello. Welcome to the ASUS Quarter Three 2023 Online Investor Conference. Today’s conference will be held by ASUSTeK Computer Co-CEO, S.Y. Hsu, Samson Hu; and our CFO, Nick Wu. The conference will be divided into two parts. In the first part, the CFO will outline our quart ...

Financial Data and Key Metrics Changes - Net revenue for Q2 2023 was NT$107 billion, representing a quarter-over-quarter growth of 5% but a year-over-year decline of 7% [3] - The company returned to profit with a net profit of NT$1.2 billion after two quarters of losses, resulting in an EPS of NT$3.5 per share [3] - Gross margin improved from 8.1% to 12.5%, and operating margin improved from -3.6% to 1.1% [5] - Non-operating income totaled NT$1.2 billion, with investment income of NT$571 million [6] Business Line Data and Key Metrics Changes - PCs accounted for 64% of revenue, components for 34%, and phones for 2% [8] - The System Business group saw a decline of 5% to 10% year-over-year, while gaming PCs maintained a market share of over 25% [28] - The Open Platform Business group experienced a 5% decline year-over-year, with motherboard shipments growing by 10% but graphics card shipments declining by 12% [31] - The AIoT Business group revenue grew by 60% year-over-year [34] Market Data and Key Metrics Changes - Revenue from Europe accounted for 30%, Asia for 48%, and the Americas for 22% [9] - European demand has returned to normal levels after a low base last year due to geopolitical conflicts [9] Company Strategy and Development Direction - The company is undergoing a reorganization of its PC-related business units to enhance coordination and respond better to consumer demand [17][18] - Focus on AI-powered PCs and AI servers as significant growth opportunities [22][23] - The company aims for a CAGR of 15% for commercial PCs and 40% for servers by 2027 [24] Management's Comments on Operating Environment and Future Outlook - Management noted a gradual improvement in revenues and profits, with expectations for stable growth in the second half of the year [15][11] - The outlook for 2024 is optimistic, driven by improved economic conditions and a replacement cycle for PCs [55] Other Important Information - The company has been recognized for its sustainability efforts and received multiple awards for its initiatives [38] - The ROG Ally handheld gaming device has seen strong market demand, contributing to revenue expectations of NT$5 billion to NT$10 billion per quarter [48] Q&A Session Summary Question: How is ASUS responding to new PC import restrictions in India? - ASUS is working with local OEMs and participating in local PLI programs, ensuring that new restrictions will not affect its business in India [40] Question: What is the outlook for AI servers and how will ASUS respond to chip shortages? - ASUS has strong relationships with suppliers and aims for over 40% CAGR in AI servers, with a target of 500% growth over five years [41][42] Question: What distinguishes AI-powered PCs from regular PCs? - AI PCs focus on improving inference capabilities, requiring dedicated computing units for enhanced user experiences [43][44] Question: What is the current share of revenue for the server product segment? - Servers currently account for a low single-digit percentage of revenue, with ambitions for significant growth in the future [57] Question: Will ASUS maintain its goal of 10% higher growth compared to the market? - The company aims to outperform market growth by 10 percentage points, supported by its in-house R&D capabilities [58] Question: Will R&D expenditure increase with new business investments? - R&D expenditures will be controlled based on operational goals, with potential for increased investment in new business units [61][62]

ASUSTEK 2Q 2023 Investor Conference Disclaimer 2 ASUSTeK's presentation contains forward-looking statements subject to significant risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements. The forward-looking statements in this release reflect the current belief of ASUS as of the date of this release, we undertake no obligation to update these forward-looking statements for new information, future events, or otherwise. | --- | --- | --- | |-------- ...