Diodes Incorporated (NASDAQ:DIOD) is one of the 14 Small Publicly Traded Semiconductor Companies to Invest in Now. On September 17, Diodes Incorporated (NASDAQ:DIOD) announced a new product called the AP22950. It is a high-voltage power switch designed with several protection features. According to the announcement by Diodes Incorporated (NASDAQ:DIOD), the protection features include reverse-current protection (RCP), undervoltage lockout (UVLO), overvoltage lockout (OVP), and overtemperature protection (O ...

[Second Quarter Highlights](index=1&type=section&id=Second%20Quarter%20Highlights) Diodes Incorporated achieved better-than-expected revenue in Q2 FY2025, marking the third consecutive quarter of year-over-year growth, indicating continuous market and demand improvement - Company revenue exceeded expectations, achieving third consecutive quarter of year-over-year growth, indicating continuous market and demand improvement[3](index=3&type=chunk)[5](index=5&type=chunk) - Point-of-sale (POS) grew sequentially in all regions, with **double-digit growth in Asia**[5](index=5&type=chunk) - Channel and internal inventory days further reduced[5](index=5&type=chunk) - Strong growth in the consumer end market led to an unfavorable product mix, with high-margin automotive and industrial markets' percentage of total revenue remaining largely flat[6](index=6&type=chunk)[7](index=7&type=chunk) - Channel inventory consumption limited manufacturing facility load increase, causing underutilized capacity costs to hinder gross margin expansion[7](index=7&type=chunk) - Non-GAAP adjusted net income grew nearly **70% sequentially** through strict expense management[7](index=7&type=chunk) Key Financial Data for Q2 FY2025 | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Sequential Change (vs Q1 2025) | Year-over-Year Change (vs Q2 2024) | | :-------------------------------- | :--------------- | :--------------- | :-------------------------------- | :-------------------------------- | | **Revenue** | $366.2 | $319.8 | +10% (vs $332.1M) | +14% | | **GAAP Gross Profit** | $115.3 | $107.4 | +10.12% (vs $104.7M) | +7.36% | | **GAAP Gross Margin** | 31.5% | 33.6% | 0.0 ppt (vs 31.5%) | -2.1 ppt | | **GAAP Net Income** | $46.1 | $8.0 | Significant improvement (vs -$4.4M) | +476.25% | | **Non-GAAP Adjusted Net Income** | $15.0 | $15.4 | +70.45% (vs $8.8M) | -2.6% | | **GAAP Diluted EPS** | $0.99 | $0.17 | Significant improvement (vs -$0.10) | +482.35% | | **Non-GAAP Diluted EPS** | $0.32 | $0.33 | +68.42% (vs $0.19) | -3.03% | | **EBITDA** | $84.5 | $41.1 | +222.5% (vs $26.2M) | +105.6% | | **Cash Flow from Operations** | $41.5 | N/A | N/A | N/A | | **Free Cash Flow** | $21.1 | N/A | N/A | N/A | | **Net Cash Flow** | -$18.2 | N/A | N/A | N/A | [Business Outlook (Q3 2025 Guidance)](index=2&type=section&id=Business%20Outlook) Diodes anticipates continued strong growth in Q3 2025, with revenue projected to increase 7% sequentially and 12% year-over-year, driven by robust demand from AI-related computing applications, consumer electronics, and the Chinese EV market in Asia - Q3 2025 revenue is projected to reach approximately **$392 million (±3%)**, with the midpoint representing a **12% year-over-year increase**, marking the fourth consecutive quarter of YoY growth[8](index=8&type=chunk)[19](index=19&type=chunk) - Growth is primarily driven by strong demand from AI-related computing applications, consumer electronics, and the Chinese electric vehicle market in Asia[8](index=8&type=chunk) Q3 2025 Financial Guidance | Metric | Expectation | | :-------------------------------- | :-------------------------------- | | **Revenue** | Approximately $392 Million (±3%) | | **GAAP Gross Margin** | 31.6% (±1%) | | **Non-GAAP Operating Expenses as % of Revenue** | Approximately 26.0% (±1%) | | **Net Interest Income** | Approximately $1.0 Million | | **Income Tax Rate** | 18.0% (±3%) | | **Shares for Diluted EPS Calculation** | Approximately 46.5 Million Shares | [Detailed Financial Results](index=2&type=section&id=Detailed%20Financial%20Results) This section provides a comprehensive overview of Diodes Incorporated's financial performance, including GAAP and non-GAAP metrics, cash flow, and balance sheet highlights [Q2 2025 Financial Performance](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Performance) Diodes Incorporated reported revenue of $366.2 million in Q2 2025, with GAAP gross profit of $115.3 million and a gross margin of 31.5% Q2 2025 GAAP Financial Data | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Q1 2025 (Million USD) | | :------------------- | :--------------- | :--------------- | :--------------- | | **Revenue** | $366.2 | $319.8 | $332.1 | | **GAAP Gross Profit** | $115.3 | $107.4 | $104.7 | | **GAAP Gross Margin** | 31.5% | 33.6% | 31.5% | | **GAAP Operating Expenses** | $105.9 | $103.7 | $103.4 | | **GAAP Operating Expenses as % of Revenue** | 28.9% | 32.4% | 31.1% | | **GAAP Net Income** | $46.1 | $8.0 | -$4.4 | | **GAAP Diluted EPS** | $0.99 | $0.17 | -$0.10 | [Non-GAAP Adjusted Net Income and EPS](index=2&type=section&id=Non-GAAP%20Adjusted%20Net%20Income%20and%20EPS) Non-GAAP adjusted net income for Q2 2025 was $15.0 million, with diluted EPS of $0.32, excluding $23.4 million in non-cash unrealized investment mark-to-market gains, $12.7 million in gain on disposition of a subsidiary, and $4.8 million in acquisition-related intangible asset amortization Q2 2025 Non-GAAP Adjusted Net Income and EPS | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Q1 2025 (Million USD) | | :------------------- | :--------------- | :--------------- | :--------------- | | **Non-GAAP Adjusted Net Income** | $15.0 | $15.4 | $8.8 | | **Non-GAAP Diluted EPS** | $0.32 | $0.33 | $0.19 | - Non-GAAP adjustments excluded **$23.4 million** in non-cash unrealized investment mark-to-market gains, **$12.7 million** in gain on disposition of a subsidiary, and **$4.8 million** in acquisition-related intangible asset amortization[12](index=12&type=chunk) - Includes approximately **$4.6 million** (after tax) of non-cash share-based compensation expense, which would increase GAAP and non-GAAP diluted EPS by **$0.10** if excluded[14](index=14&type=chunk) [EBITDA](index=3&type=section&id=EBITDA) EBITDA (a non-GAAP metric) for Q2 2025 was $84.5 million, representing 23.1% of revenue, showing significant growth compared to both the prior year and previous quarter EBITDA Performance | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Q1 2025 (Million USD) | | :----- | :--------------- | :--------------- | :--------------- | | **EBITDA** | $84.5 | $41.1 | $26.2 | | **EBITDA as % of Revenue** | 23.1% | 12.8% | 7.9% | [Cash Flow and Balance Sheet Summary](index=3&type=section&id=Cash%20Flow%20and%20Balance%20Sheet%20Summary) In Q2 2025, net cash flow from operating activities was $41.5 million, and free cash flow was $21.1 million Q2 2025 Cash Flow | Metric | Amount (Million USD) | | :------------------- | :--------------- | | **Net Cash Flow from Operations** | $41.5 | | **Free Cash Flow** | $21.1 | | **Net Cash Flow** | -$18.2 | | **Capital Expenditures** | $20.4 | - Net cash flow was **negative $18.2 million**, primarily including approximately **$49.2 million** in increased equity investments and **$10 million** for the stock repurchase program[16](index=16&type=chunk) Key Balance Sheet Data as of June 30, 2025 | Metric | Amount (Million USD) | | :------------------- | :--------------- | | **Cash, Cash Equivalents, Restricted Cash, and Short-Term Investments** | Approximately $333 | | **Total Debt** | Approximately $54 | | **Working Capital** | Approximately $871 | [Corporate Information](index=4&type=section&id=Corporate%20Information) This section provides essential corporate details, including information on the conference call, an overview of Diodes Incorporated, a safe harbor statement, and contact information for investor relations [Conference Call](index=4&type=section&id=Conference%20Call) Diodes Incorporated held a conference call on August 7, 2025, to discuss its second-quarter financial results, providing dial-in information and webcast details for investors and analysts - The conference call was held on **August 7, 2025**, at 4:00 PM CT (5:00 PM ET)[20](index=20&type=chunk) - Dial-in information and a webcast link were provided, with a telephone replay service available until **August 14, 2025**[20](index=20&type=chunk)[21](index=21&type=chunk) [About Diodes Incorporated](index=4&type=section&id=About%20Diodes%20Incorporated) Diodes Incorporated is a provider of high-quality semiconductor products for automotive, industrial, computing, consumer, and communications markets, leveraging its extensive analog and discrete power solutions and advanced packaging technologies - Diodes Incorporated, an S&P SmallCap 600 and Russell 3000 Index company, supplies high-quality semiconductor products to leading global companies in the automotive, industrial, computing, consumer, and communications markets[22](index=22&type=chunk) - The company leverages its expanded analog and discrete power solutions product portfolio and leading-edge packaging technologies to meet customer needs[22](index=22&type=chunk) [Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995](index=4&type=section&id=Safe%20Harbor%20Statement%20Under%20the%20Private%20Securities%20Litigation%20Reform%20Act%20of%201995) This statement warns investors that forward-looking statements in the report involve risks and uncertainties that could cause actual results to differ materially from expectations, including market, acquisition, operational, and economic factors - Forward-looking statements in the report involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements[23](index=23&type=chunk) - Potential risks and uncertainties include: failure to achieve expectations, failure to realize anticipated benefits of acquisitions or slower-than-expected integration, inability to maintain current growth strategies or performance, inability to increase automotive, industrial, or other revenue and market share, risks of domestic and international operations, cyclical downturns in the semiconductor industry, changes in end-market demand or product mix, unfavorable exchange rates, inaccurate future outlook or guidance, global economic weakness or unstable financial markets, trade restrictions, and vulnerabilities in information technology systems[24](index=24&type=chunk) [Company and Investor Relations Contact Information](index=5&type=section&id=Company%20Contact) Provides detailed contact information for Diodes Incorporated's company contact (Gurmeet Dhaliwal, Director of Investor Relations and Corporate Marketing) and investor relations contact (Leanne Sievers, President of Shelton Group) - Company Contact: Gurmeet Dhaliwal (Director, Investor Relations and Corporate Marketing), Phone: **408-232-9003**, Email: Gurmeet_Dhaliwal@diodes.com[27](index=27&type=chunk) - Investor Relations Contact: Leanne Sievers (President, Shelton Group), Phone: **949-224-3874**, Email: lsievers@sheltongroup.com[27](index=27&type=chunk) [Supplemental Financial Information](index=6&type=section&id=Supplemental%20Financial%20Information) This section provides detailed consolidated financial statements, including statements of operations, reconciliations of GAAP to non-GAAP metrics, and balance sheets, offering a comprehensive view of the company's financial position and performance [Consolidated Condensed Statements of Operations](index=6&type=section&id=CONSOLIDATED%20CONDENSED%20STATEMENTS%20OF%20OPERATIONS) This section presents Diodes Incorporated's consolidated condensed statements of operations, detailing GAAP financial data for the three and six months ended June 30, 2025 and 2024, including net sales, cost of sales, gross profit, operating expenses, and net income Consolidated Condensed Statements of Operations (Unaudited, in Thousands of USD) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------- | :--------------- | :--------------- | :--------------- | :--------------- | | **Net Sales** | $366,212 | $319,771 | $698,325 | $621,743 | | **Cost of Sales** | $250,888 | $212,385 | $478,307 | $414,773 | | **Gross Profit** | $115,324 | $107,386 | $220,018 | $206,970 | | **Operating Expenses** | $105,935 | $103,678 | $209,333 | $190,314 | | **Operating Income** | $9,389 | $3,708 | $10,685 | $16,656 | | **Other Income (Expense)** | $43,834 | $9,096 | $39,771 | $14,954 | | **Income Before Income Taxes and Noncontrolling Interests** | $53,223 | $12,804 | $50,456 | $31,610 | | **Income Tax Expense** | $9,063 | $2,643 | $9,083 | $6,180 | | **Net Income** | $44,160 | $10,161 | $41,373 | $25,430 | | **Net Income Attributable to Common Stockholders** | $46,098 | $8,000 | $41,661 | $22,038 | | **Diluted EPS** | $0.99 | $0.17 | $0.90 | $0.48 | [Reconciliation of Net Income to Adjusted Net Income](index=7&type=section&id=RECONCILIATION%20OF%20NET%20INCOME%20TO%20ADJUSTED%20NET%20INCOME) This section provides detailed reconciliations of GAAP net income to non-GAAP adjusted net income, outlining various adjustments made across different reporting periods to offer a clearer view of operational performance [For the three months ended June 30, 2025](index=7&type=section&id=For%20the%20three%20months%20ended%20June%2030%2C%202025) This reconciliation details adjustments for acquisition-related intangible asset amortization, acquisition-related costs, restructuring charges, gain on disposition of a subsidiary, unrealized investment gains, and board member retirement benefits for the three months ended June 30, 2025 Q2 2025 Reconciliation of Net Income to Adjusted Net Income (Unaudited, in Thousands of USD) | Metric | Amount | | :------------------------------------- | :--------------- | | **GAAP Net Income** | $46,098 | | **Diluted EPS (GAAP)** | $0.99 | | **Adjustments:** | | | Acquisition-related intangible asset amortization | $4,805 | | Acquisition-related costs | $61 | | Restructuring charges | $54 | | Gain on disposition of a subsidiary | $(12,693) | | Unrealized investment gains | $(23,383) | | Board member retirement benefits | $92 | | **Non-GAAP Adjusted Net Income** | $15,034 | | **Non-GAAP Diluted EPS** | $0.32 | [For the three months ended June 30, 2024](index=8&type=section&id=For%20the%20three%20months%20ended%20June%2030%2C%202024) This reconciliation for the three months ended June 30, 2024, primarily includes adjustments for acquisition-related intangible asset amortization, executive retirement benefits, restructuring charges, and unrealized investment gains Q2 2024 Reconciliation of Net Income to Adjusted Net Income (Unaudited, in Thousands of USD) | Metric | Amount | | :------------------------------------- | :--------------- | | **GAAP Net Income** | $8,000 | | **Diluted EPS (GAAP)** | $0.17 | | **Adjustments:** | | | Acquisition-related intangible asset amortization | $3,147 | | Executive retirement benefits | $509 | | Restructuring charges | $7,244 | | Unrealized investment gains | $(3,480) | | **Non-GAAP Adjusted Net Income** | $15,420 | | **Non-GAAP Diluted EPS** | $0.33 | [For the six months ended June 30, 2025](index=9&type=section&id=For%20the%20six%20months%20ended%20June%2030%2C%202025) This reconciliation for the six months ended June 30, 2025, includes adjustments for acquisition-related intangible asset amortization, acquisition-related costs, restructuring charges, impairment of equity investment, gain on disposition of a subsidiary, unrealized investment gains, and board member retirement benefits H1 2025 Reconciliation of Net Income to Adjusted Net Income (Unaudited, in Thousands of USD) | Metric | Amount | | :------------------------------------- | :--------------- | | **GAAP Net Income** | $41,661 | | **Diluted EPS (GAAP)** | $0.90 | | **Adjustments:** | | | Acquisition-related intangible asset amortization | $9,598 | | Acquisition-related costs | $196 | | Restructuring charges | $280 | | Impairment of equity investment | $4,849 | | Gain on disposition of a subsidiary | $(12,693) | | Unrealized investment gains | $(20,157) | | Board member retirement benefits | $92 | | **Non-GAAP Adjusted Net Income** | $23,826 | | **Non-GAAP Diluted EPS** | $0.51 | [For the six months ended June 30, 2024](index=10&type=section&id=For%20the%20six%20months%20ended%20June%2030%2C%202024) This reconciliation for the six months ended June 30, 2024, includes adjustments for acquisition-related intangible asset amortization, executive retirement benefits, restructuring charges, unrealized investment gains, and manufacturing facility insurance proceeds H1 2024 Reconciliation of Net Income to Adjusted Net Income (Unaudited, in Thousands of USD) | Metric | Amount | | :------------------------------------- | :--------------- | | **GAAP Net Income** | $22,038 | | **Diluted EPS (GAAP)** | $0.48 | | **Adjustments:** | | | Acquisition-related intangible asset amortization | $6,258 | | Executive retirement benefits | $509 | | Restructuring charges | $7,244 | | Unrealized investment gains | $(3,776) | | Manufacturing facility insurance proceeds | $(3,843) | | **Non-GAAP Adjusted Net Income** | $28,430 | | **Non-GAAP Diluted EPS** | $0.61 | [Explanation of Adjusted Net Income and Adjusted EPS](index=11&type=section&id=ADJUSTED%20NET%20INCOME%20AND%20ADJUSTED%20EARNINGS%20PER%20SHARE) This section explains the various adjustments made to calculate non-GAAP adjusted net income and EPS, including acquisition-related intangible asset amortization, board member retirement benefits, acquisition-related costs, manufacturing facility insurance proceeds, unrealized investment gains, restructuring charges, gain on disposition of a subsidiary, and impairment of equity investment, along with their rationales - The company excludes acquisition-related intangible asset amortization to ensure comparability of operating results between newly acquired and long-held businesses, and to eliminate the significant variability and unpredictability of this expense across companies[39](index=39&type=chunk) - Excludes board member retirement-related costs (cash payments and accelerated vesting of equity awards) as they do not represent ongoing operating expenses[40](index=40&type=chunk) - Excludes acquisition-related costs (consulting, legal, and other professional fees) to more accurately reflect costs without special events like acquisitions and to facilitate comparison with periods without such costs[41](index=41&type=chunk) - Excludes manufacturing facility insurance proceeds to more accurately reflect the company's ongoing operations[42](index=42&type=chunk) - Excludes unrealized mark-to-market adjustments for various equity-related investments, as they do not reflect ongoing operations[43](index=43&type=chunk) - Excludes restructuring charges to provide an enhanced view of the company's cost structure and to facilitate comparison with periods without such charges[44](index=44&type=chunk) - Excludes gain on disposition of a subsidiary, as it does not reflect ongoing operations[45](index=45&type=chunk) - Excludes impairment of equity investment, as it does not reflect ongoing operations[46](index=46&type=chunk) [Cash Flow Items](index=12&type=section&id=CASH%20FLOW%20ITEMS) This section defines Free Cash Flow (FCF) as a non-GAAP financial measure and provides FCF data for Q2 2025, highlighting its role in supporting new product development, acquisitions, and debt reduction - Free Cash Flow (FCF) is a non-GAAP financial measure calculated by subtracting capital expenditures from cash flow from operations[48](index=48&type=chunk) - Q2 2025 FCF was **$21.1 million**, representing the cash and cash equivalents the company can generate after cash expenditures required to maintain or expand property, plant, and equipment[48](index=48&type=chunk) [Consolidated Reconciliation of Net Income to EBITDA](index=12&type=section&id=CONSOLIDATED%20RECONCILIATION%20OF%20NET%20INCOME%20TO%20EBITDA) This section provides a reconciliation of GAAP net income to EBITDA (a non-GAAP metric) and explains EBITDA's utility as a tool for evaluating company profitability and operational performance, especially when comparing with other companies in the industry - EBITDA, representing earnings before interest, taxes, depreciation, and amortization, is considered useful by management for investors as it is frequently used by securities analysts, investors, and financial institutions to evaluate companies within the industry and provides further clarity on profitability[50](index=50&type=chunk) Reconciliation of Net Income to EBITDA (Unaudited, in Thousands of USD) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------- | :--------------- | :--------------- | :--------------- | :--------------- | | **Net Income (GAAP)** | $46,098 | $8,000 | $41,661 | $22,038 | | **Add:** | | | | | | Net interest expense | $(6,518) | $(3,385) | $(11,864) | $(7,467) | | Income tax expense | $9,063 | $2,643 | $9,083 | $6,180 | | Depreciation and amortization | $35,895 | $33,794 | $71,813 | $68,649 | | **EBITDA (Non-GAAP)** | $84,538 | $41,052 | $110,693 | $89,400 | [Consolidated Condensed Balance Sheets](index=13&type=section&id=CONSOLIDATED%20CONDENSED%20BALANCE%20SHEETS) This section presents Diodes Incorporated's consolidated condensed balance sheets, detailing assets, liabilities, and stockholders' equity as of June 30, 2025, and December 31, 2024 Consolidated Condensed Balance Sheets (Unaudited, in Thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------- | :--------------- | :--------------- | | **Assets:** | | | | Cash and cash equivalents | $317,049 | $308,671 | | Short-term investments | $10,285 | $7,464 | | Accounts receivable, net | $313,492 | $325,517 | | Inventories | $482,701 | $474,948 | | **Total current assets** | $1,244,614 | $1,224,153 | | Property, plant and equipment, net | $680,042 | $684,259 | | Goodwill | $185,292 | $181,555 | | Intangible assets, net | $56,328 | $67,397 | | **Total assets** | $2,471,555 | $2,386,281 | | **Liabilities:** | | | | Line of credit | $27,562 | $31,429 | | Accounts payable | $148,269 | $133,765 | | **Total current liabilities** | $373,633 | $375,596 | | Long-term debt, net | $24,865 | $19,563 | | **Total liabilities** | $537,384 | $517,334 | | **Stockholders' Equity:** | | | | Common stock | $37,142 | $37,083 | | Retained earnings | $1,760,959 | $1,719,298 | | Treasury stock | $(348,104) | $(338,100) | | **Total stockholders' equity** | $1,877,103 | $1,795,301 | | **Noncontrolling interests** | $57,068 | $73,646 | | **Total equity** | $1,934,171 | $1,868,947 | | **Total liabilities and stockholders' equity** | $2,471,555 | $2,386,281 |

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $366.2 million, a 14% increase year-over-year from $319.8 million in Q2 2024 and a 10% increase from $332.1 million in Q1 2025 [10] - Gross profit for Q2 2025 was $115.3 million, representing 31.5% of revenue, compared to 33.6% in the prior year quarter [10] - GAAP net income for Q2 2025 was $46.1 million or $0.99 per diluted share, compared to $8 million or $0.17 per diluted share in the prior year [12] - Non-GAAP adjusted net income was $15 million or $0.32 per diluted share, compared to $15.4 million or $0.33 per diluted share in Q2 2024 [12] - EBITDA for Q2 2025 was $84.5 million or 23.1% of revenue, compared to 12.8% in the prior year period [13] Business Line Data and Key Metrics Changes - The consumer end market experienced the strongest growth, while automotive and industrial markets remained flat as a percentage of total revenue [7] - Automotive market revenue was 19% of total product revenue, showing a year-over-year increase of 23.5% [35] - Industrial market showed gradual demand improvement, particularly in AI robotics and medical applications [22] - Computing market saw strong demand for AI-related applications, with significant opportunities in data centers [23] Market Data and Key Metrics Changes - Asia represented 78% of revenue, Europe 12%, and North America 10% [19] - The company reported double-digit growth in Asia, particularly in AI-related computing applications and EV automotive market in China [9][19] Company Strategy and Development Direction - The company aims to extend strong growth momentum with a projected revenue increase of 7% sequentially and 12% year-over-year in Q3 2025 [9] - Focus on new product initiatives, with over 100 new part numbers introduced, over 50% of which were automotive parts [18] - Emphasis on improving product mix and driving margin expansion through new product introductions and cost improvements [37][58] Management Comments on Operating Environment and Future Outlook - Management noted ongoing improvement in market conditions and demand across end markets, with inventory digestion extending particularly in automotive and industrial sectors [27] - The company is well-positioned with a broadened portfolio of products and increasing design wins to drive continuous growth and future margin expansion [27] Other Important Information - Cash flow provided by operations was $41.5 million for Q2 2025, with free cash flow of $21.1 million [13] - Total debt at the end of Q2 was approximately $54 million, with working capital around $871 million [14] Q&A Session Summary Question: How much of the demand in Asia is related to tariff-driven pull-ins? - Management indicated that tariff pull-ins are minimal, with demand driven by strong market conditions and new designs [33] Question: What is the status of inventory digestion in the automotive sector? - Management acknowledged ongoing inventory digestion but noted overall market improvement, with automotive revenue maintaining 19% quarter-over-quarter [35] Question: How do new products impact margin opportunities? - New products typically offer additional features that allow for premium pricing, which can improve overall cost structure and margins [37] Question: What is the growth expectation for AI-related products? - AI-related products, including PCIe packet switches, are expected to drive significant momentum, with multiple designs across various applications [42] Question: How is the company responding to pricing changes in the industry? - The company is focused on long-term customer relationships rather than short-term pricing strategies, aiming to leverage opportunities for growth [47] Question: What is the timeline for shifting back to in-house capacity? - Management confirmed good progress in qualifying products for internal wafer fabrication, with expectations for continued support from key customers [50]

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited financial statements for H1 2025 show significant growth in net income, EPS, and positive operating cash flow, with total assets reaching **$2.47 billion** [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and equity as of June 30, 2025 Balance Sheet Summary (in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $1,244,614 | $1,224,153 | | **Total Assets** | $2,471,555 | $2,386,281 | | **Total Current Liabilities** | $373,633 | $375,596 | | **Total Liabilities** | $537,384 | $517,334 | | **Total Equity** | $1,934,171 | $1,868,947 | - Inventories increased slightly to **$482.7 million** as of June 30, 2025, from **$474.9 million** at the end of 2024[10](index=10&type=chunk) - Cash and cash equivalents stood at **$317.0 million** at the end of Q2 2025, a modest increase from **$308.7 million** at year-end 2024[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's revenue, gross profit, and net income performance for the second quarter and first half of 2025 Quarterly Performance (in thousands of USD, except per share data) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Net Sales | $366,212 | $319,771 | +14.5% | | Gross Profit | $115,324 | $107,386 | +7.4% | | Income from Operations | $9,389 | $3,708 | +153.2% | | Net Income Attributable to Common Stockholders | $46,098 | $8,000 | +476.2% | | Diluted EPS | $0.99 | $0.17 | +482.4% | Six-Month Performance (in thousands of USD, except per share data) | Metric | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Net Sales | $698,325 | $621,743 | +12.3% | | Gross Profit | $220,018 | $206,970 | +6.3% | | Income from Operations | $10,685 | $16,656 | -35.8% | | Net Income Attributable to Common Stockholders | $41,661 | $22,038 | +89.0% | | Diluted EPS | $0.90 | $0.48 | +87.5% | - A significant unrealized gain on investments of **$29.6 million** and a **$13.7 million** gain on the disposal of a subsidiary substantially boosted net income in Q2 2025[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section details the company's cash generation and usage across operating, investing, and financing activities for H1 2025 Cash Flow Summary for Six Months Ended June 30 (in thousands of USD) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash flows from operating activities | $98,264 | $(16,744) | | Net cash flows from investing activities | $(78,614) | $(30,840) | | Net cash flows from financing activities | $(30,116) | $(16,974) | | **Change in cash and cash equivalents** | **$8,053** | **$(50,826)** | - Operating cash flow improved significantly in H1 2025 to **$98.3 million**, compared to a use of cash of **$16.7 million** in H1 2024, driven by higher net income and favorable changes in working capital[22](index=22&type=chunk) - Investing activities in H1 2025 included **$36.3 million** in capital expenditures, **$49.2 million** for purchases of equity securities, and proceeds of **$16.0 million** from the sale of a subsidiary[22](index=22&type=chunk) - Financing activities in H1 2025 included a **$10.0 million** repurchase of common stock[22](index=22&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides supplementary information on segment operations, customer concentration, regional sales, and significant transactions - The company operates in a single segment, standard semiconductor products, serving the industrial, automotive, computing, consumer, and communications markets[49](index=49&type=chunk)[90](index=90&type=chunk) - In Q2 2025, two customers accounted for **12.5%** and **12.0%** of net sales, respectively. For the first six months of 2025, two customers represented **11.9%** and **11.4%** of net sales[50](index=50&type=chunk) Net Sales by Region (in thousands of USD) | Region | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Asia | $285,976 | $245,643 | | Europe | $45,545 | $47,364 | | Americas | $34,691 | $26,764 | - On May 8, 2025, the company sold its **56.4%** ownership stake in TF Semiconductor Solutions, Inc. to Microchip Technology Incorporated, resulting in a gain of **$13.7 million**[86](index=86&type=chunk) - In May 2025, the company entered a joint venture to acquire a **43%** interest in ATX Semiconductor SDN in Malaysia to build synergies in testing and packaging[75](index=75&type=chunk)[83](index=83&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2025 sales growth driven by volume, gross margin decline due to pricing and utilization, and strong liquidity [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section analyzes the company's net sales, gross profit, and operating expenses for the second quarter and first half of 2025 Q2 2025 vs Q2 2024 Performance Summary (in thousands of USD) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $366,212 | $319,771 | 14.5% | | Gross profit | $115,324 | $107,386 | 7.4% | | Gross Margin | 31.5% | 33.6% | -2.1 p.p. | | Total operating expense | $105,935 | $103,678 | 2.2% | - The **14.5%** increase in Q2 2025 net sales was driven by a **19.5%** increase in volume, partially offset by a **4.2%** decrease in weighted-average sales price due to market conditions[97](index=97&type=chunk)[98](index=98&type=chunk) - The decrease in Q2 2025 gross profit margin to **31.5%** from **33.6%** in Q2 2024 was primarily due to lower factory utilization and market pricing pressures[98](index=98&type=chunk) - For the six months ended June 30, 2025, net sales increased **12.3%** YoY, while gross profit margin decreased to **31.5%** from **33.3%**[104](index=104&type=chunk)[105](index=105&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=34&type=section&id=Financial%20Condition,%20Liquidity%20and%20Capital%20Resources) This section assesses the company's cash position, working capital, and available credit facilities, highlighting its liquidity - As of June 30, 2025, the company had **$322.8 million** in cash, cash equivalents, and restricted cash, up from **$314.7 million** at year-end 2024[109](index=109&type=chunk) - Working capital increased to **$871.0 million** at June 30, 2025, from **$848.6 million** at December 31, 2024[110](index=110&type=chunk) - The company has access to a **$225.0 million** revolving credit facility, which was undrawn as of June 30, 2025, and various short-term credit facilities for its Asia subsidiaries totaling **$115.5 million**, with **$87.5 million** available[112](index=112&type=chunk)[113](index=113&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to the company's market risks were reported compared to the 2024 Annual Report on Form 10-K - There have been no material changes to the company's market risks from those disclosed in the 2024 Form 10-K[163](index=163&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) CEO and CFO confirmed effective disclosure controls and procedures, with no material changes to internal control over financial reporting in Q2 2025 - The CEO and CFO evaluated the company's disclosure controls and procedures and found them to be effective as of June 30, 2025[164](index=164&type=chunk) - No changes occurred in the company's internal control over financial reporting during Q2 2025 that materially affected, or are reasonably likely to materially affect, these controls[165](index=165&type=chunk) [PART II – OTHER INFORMATION](index=37&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any pending litigation deemed material - The Company is not currently a party to any pending litigation that it considers material[168](index=168&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported, reiterating concerns like tariffs, industry cyclicality, and international operational risks - There have been no material changes to the risk factors from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[170](index=170&type=chunk) - Key business risks include the impact of government tariffs, the cyclical nature of the semiconductor industry, intense competition, and reliance on third-party suppliers[133](index=133&type=chunk)[134](index=134&type=chunk)[141](index=141&type=chunk) - International operations expose the company to risks such as economic slowdowns in China, foreign currency fluctuations, and changes in foreign tax laws[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **$10.0 million** of common stock in Q2 2025 under a **$100.0 million** program, with **$90.0 million** remaining Common Stock Repurchases in Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share (USD) | Total Cost (approx. USD) | | :--- | :--- | :--- | :--- | | May 13-27, 2025 | 210,944 | $47.43 | $10,004,193 | - The repurchases were made under a **$100.0 million** stock buyback program announced on May 8, 2025. As of the end of the period, approximately **$90.0 million** remained available under this authorization[172](index=172&type=chunk) [Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed, including CEO and CFO certifications and Inline XBRL documents - The exhibits filed with this report include CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, as well as Inline XBRL data files[176](index=176&type=chunk)

Financial Performance - Q2 2025 - Revenue reached $366.2 million, a 10% sequential increase and a 14% year-over-year increase[24, 23] - GAAP gross profit was $115.3 million, with a GAAP gross margin of 31.5%[24, 31] - Non-GAAP EPS was $0.32, a 68.4% sequential increase[24] - Non-GAAP net income was $15 million, a 70.5% sequential increase[24, 31] - EBITDA reached $84.5 million, representing 23.1% of revenue[24, 31] - Cash flow from operations was $41.5 million, representing 11.3% of revenue[24, 31] - The company holds $333 million in cash and cash equivalents with $54 million in total debt[23, 24] Future Outlook - Q3 2025 - The company expects revenue of approximately $392 million, plus or minus 3%, representing a 12% year-over-year growth at the mid-point[3, 33] - GAAP gross margin is expected to be 31.6%, plus or minus 1%[3, 33] - Non-GAAP operating expenses are expected to be approximately 26% of revenue, plus or minus 1%[3, 33] - Net interest income is expected to be approximately $1 million[3, 33]

Financial Performance & Outlook - Diodes Incorporated reported first quarter 2025 revenue of $332.1 million[118] - The GAAP gross profit margin for the first quarter of 2025 was 31.5%[118] - The company anticipates second quarter 2025 revenue to be approximately $355 million, plus or minus 3%[3] - The company expects GAAP gross margin for the second quarter of 2025 to be 31.8%, plus or minus 1%[3] Strategic Goals & Market Focus - Diodes Incorporated aims to achieve $1 billion in gross profit[25] - The company's long-term revenue target is $2.5 billion[25] - Diodes Incorporated is focusing on high-margin automotive and industrial solutions[121] - Automotive and industrial sectors accounted for 42% of the company's product revenue in 2024[13] Automotive Market Growth - The potential revenue per car for Diodes' products is estimated at $213.25[53] - The company's dollar content per car is projected to increase to $213 in 2025[56] Key Products & Applications - Diodes' key products for AI servers include Analog, Power Management, MOS/BJT, and Timing and Connectivity, totaling $90 per box[83] - The company provides total system solutions for various applications, including embedded systems and cloud computing[42, 81]

Summary of Diodes (DIOD) 2025 Conference Call Company Overview - Diodes is a leading supplier of analog and discrete semiconductor solutions, serving various end markets including automotive, industrial, compute, communications, and consumer [3][4] - The company has been profitable for 33 consecutive years and reported $1.3 billion in revenue for 2024 [4] Market Segments and Performance - Diodes has consistently exceeded its goal of generating 40% of revenue from automotive and industrial segments, achieving a combined 42% in recent quarters [5][7] - The automotive segment has grown at a CAGR of 22% since 2013, with content per car increasing from $28 in 2013 to $213 in 2025 [6] - The computing segment is the largest, growing 27% from the previous quarter [7] Inventory and Demand Insights - Current inventory levels are slightly above the normal range of 11 to 14 weeks, but there has been a decrease in both internal and channel inventory [13][14] - The company expects a stronger second half of 2025, with indications of recovery in demand across various segments, particularly automotive and industrial [17][19] Pricing Strategy and Market Position - Diodes has focused on long-term relationships with customers rather than short-term pricing gains, which has resulted in a solid market position [23][25] - Pricing trends are stabilizing, with a historical model of 1.5% to 2% quarterly price erosion [27] Competition and Market Dynamics - Competition from local Chinese suppliers remains, but there is a belief that consolidation will occur in the market [30][32] - Diodes is focusing on differentiated, higher-end products to maintain competitiveness in the Chinese market [33] Product Development and Innovation - The company introduced over 300 new products for the automotive segment last year, with ongoing development in power management and silicon carbide technologies [16][56] - The Pericom product line is expanding into automotive and industrial applications, with a focus on timing and signal integrity products [49][50] Gross Margin and Production Strategy - The company is working to improve gross margins through increased internal production and a better product mix, with a current hybrid model of 55% internal and 45% external production [63][64] - Focus on higher-margin products in automotive and industrial segments is expected to enhance overall margins [65] Conclusion - Diodes is well-positioned for growth with a strong focus on innovation, customer relationships, and strategic market positioning, particularly in the automotive and industrial sectors [25][65]

Revenue Performance - Revenue for Q1 2025 was $332.1 million, a 10% increase from $302.0 million in Q1 2024[4] - Net sales for Q1 2025 increased to $332.1 million, up 10% from $302.0 million in Q1 2024[27] - The company expects Q2 2025 revenue to increase to approximately $355 million, representing an 11% year-over-year growth[17] Profitability Metrics - GAAP net loss was $4.4 million, or a loss of $0.10 per diluted share, compared to a net income of $14.0 million, or $0.30 per diluted share in Q1 2024[9] - Non-GAAP adjusted net income was $8.8 million, or $0.19 per diluted share, down from $13.0 million, or $0.28 per diluted share in Q1 2024[10] - GAAP gross profit margin was 31.5%, compared to 33.0% in Q1 2024[4] - EBITDA for Q1 2025 was $26.2 million, or 7.9% of revenue, compared to $48.3 million, or 16.0% of revenue in Q1 2024[13] - Free cash flow (FCF) for Q1 2025 was $40.8 million, indicating strong cash generation after capital expenditures[42] - EBITDA for Q1 2025 was $26.2 million, down from $48.3 million in Q1 2024, highlighting a decrease in operational profitability[45] Operating Expenses - Research and development expenses increased to $38.6 million in Q1 2025, up from $34.0 million in Q1 2024, reflecting ongoing investment in new technologies[27] - Total operating expenses for Q1 2025 were $103.4 million, compared to $86.6 million in Q1 2024, indicating a rise in operational costs[27] - Non-GAAP operating expenses for Q2 2025 are expected to be approximately 28.0% of revenue, plus or minus 1%[18] Cash Flow and Liquidity - Cash flow from operations for Q1 2025 was $56.7 million, with free cash flow of $40.8 million[14] - As of March 31, 2025, the company had approximately $349 million in cash and cash equivalents[15] - Cash and cash equivalents increased from $308,671 million to $335,754 million, reflecting a growth of about 8.5%[47] Balance Sheet Highlights - Total assets decreased from $2,386,281 million on December 31, 2024, to $2,356,341 million on March 31, 2025, a decline of approximately 1.25%[47] - Current assets remained relatively stable, totaling $1,224,890 million as of March 31, 2025, compared to $1,224,153 million at the end of 2024[47] - Accounts receivable decreased from $325,517 million to $302,241 million, a reduction of approximately 7.1%[47] - Total liabilities decreased from $517,334 million to $484,507 million, a decline of about 6.34%[47] - Total stockholders' equity increased from $1,868,947 million to $1,871,834 million, showing a slight growth of approximately 0.15%[47] - Retained earnings slightly decreased from $1,719,298 million to $1,714,861 million, a decline of about 0.26%[47] Shareholder Information - The number of common shares issued and outstanding increased from 46,332,891 to 46,395,345[47] - Treasury stock remained unchanged at a cost of $338,100 million[47] Other Comprehensive Income - The company recorded an impairment of equity investment of $5.8 million in Q1 2025, which negatively impacted net income[27] - The company reported a decrease in accumulated other comprehensive loss from $146,724 million to $141,902 million, indicating an improvement[47]

Core Points - Diodes Incorporated held its First Quarter 2025 Financial Results Conference Call on May 8, 2025, with key participants including the President, CFO, and Senior VP of Worldwide Sales and Marketing [1][3]. - The financial results announced are preliminary and subject to finalization and review by the independent registered public accounting firm, indicating that they are unaudited and may be revised before the filing of Form 10-Q for the quarter ended March 31, 2025 [4]. Company Overview - The conference call featured Leanne Sievers from Shelton Group, who introduced the company’s leadership team, including Gary Yu (President), Brett Whitmire (CFO), and Emily Yang (SVP, Worldwide Sales and Marketing) [2][3].

Group 1: Earnings Performance - Diodes reported quarterly earnings of $0.19 per share, exceeding the Zacks Consensus Estimate of $0.18 per share, but down from $0.28 per share a year ago, representing an earnings surprise of 5.56% [1] - The company posted revenues of $332.11 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.47%, compared to year-ago revenues of $301.97 million [2] - Over the last four quarters, Diodes has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Group 2: Stock Performance and Outlook - Diodes shares have declined approximately 36.4% since the beginning of the year, contrasting with the S&P 500's decline of -4.3% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.41 on revenues of $354.9 million, and for the current fiscal year, it is $1.82 on revenues of $1.43 billion [7] Group 3: Industry Context - The Electronics - Semiconductors industry, to which Diodes belongs, is currently ranked in the bottom 43% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The current estimate revisions trend for Diodes is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6]