Magnachip Semiconductor (NYSE: MX) Q1 2025 Earnings Materials May 12, 2025 1 Forward-Looking Statements Information in this presentation regarding Magnachip's forecasts, business outlook, expectations and beliefs are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. All forward-looking statements included or incorporated by reference in this presentation, including expectations about estimated historical or future oper ...

Magnachip shares have lost about 19.2% since the beginning of the year versus the S&P 500's decline of -3.8%. Magnachip (MX) came out with a quarterly loss of $0.10 per share versus the Zacks Consensus Estimate of a loss of $0.28. This compares to loss of $0.28 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 64.29%. A quarter ago, it was expected that this chip products maker would post a loss of $0.22 per share when it actua ...

Financial Data and Key Metrics Changes - Consolidated Q1 revenue from continuing operations was $44.7 million, up 12.1% year over year and down 8.5% sequentially, aligning with the midpoint of guidance [10][21] - Consolidated Q1 gross profit margin from continuing operations was 20.9%, up 3.3 percentage points year over year but down 2.3 percentage points sequentially, exceeding the high end of guidance [10][22] - Q1 operating loss narrowed to $6.3 million compared to $9.4 million in Q1 2024, with adjusted operating loss of $5.4 million [26][27] Business Line Data and Key Metrics Changes - Power Analog Solutions revenue was $39.9 million, up 9.1% year over year and down 8.3% quarter over quarter, representing nearly 90% of Q1 consolidated revenue [15][21] - Power IC revenue was $4.9 million, an increase of 44.1% year over year but down 10% sequentially [19][21] - The industrial segment saw an 8.7% year-over-year decline, while the communication segment increased nearly 64% year over year [16][17] Market Data and Key Metrics Changes - The communication market accounted for 23% of Power Analog Solutions revenue in Q1, driven by design wins in AI-enabled smartphones [17] - The automotive segment showed strong year-over-year growth, expanding beyond Korea and Japan [18] - The computing segment experienced a 10% year-over-year decline due to weaker demand from China [17] Company Strategy and Development Direction - The company plans to shut down its display business by the end of Q2 2025 to focus on power semiconductor operations [6][23] - The strategic pivot aims to achieve a $300 million annual revenue run rate with a 30% gross profit margin target within three years, referred to as the "three-three-three strategy" [9][37] - The company expects to attain quarterly adjusted EBITDA breakeven from continuing operations by the end of 2025 [31] Management Comments on Operating Environment and Future Outlook - Management acknowledged challenges from an unpredictable macroeconomic landscape but remains optimistic about achieving growth targets [9][37] - The company expects mid single-digit sequential growth in Q2, with strong year-over-year growth anticipated in the communications segment [36] - Management emphasized the importance of operational efficiency and shareholder value in the strategic pivot [36][37] Other Important Information - The company expects cash inflow of approximately $15 million to $20 million from the liquidation of the display business over two years [33] - Q1 CapEx was $200,000, with a total forecast range of $26 million to $30 million for the full year 2025 [29][30] - The company repurchased approximately 300,000 shares for $1.1 million in Q1 2025, with remaining authorization of about 23.5 million shares [27] Q&A Session Summary Question: Impact of tariffs on manufacturing and markets - Management noted minimal direct shipment to the U.S. and manageable tariff risks, with 94% of power revenue coming from Asia [42][43] Question: Drivers for gross margin improvement - Management highlighted the transition from foundry services to new generation power products as a key driver for gross margin improvement [44][45] Question: Focus on Power IC vs. Power Analog segments - Management confirmed a concerted effort to grow both segments, aiming for double-digit growth in the coming years [46]

Financial Data and Key Metrics Changes - Consolidated Q1 revenue from continuing operations was $44.7 million, up 12.1% year over year and down 8.5% sequentially [9][22] - Consolidated Q1 gross profit margin from continuing operations was 20.9%, up 3.3 percentage points year over year but down 2.3 percentage points sequentially [10][23] - Q1 operating loss narrowed to $6.3 million compared to an operating loss of $9.4 million in Q1 2024 [26] - Q1 GAAP diluted loss per share was $0.14, improved from a loss of $0.37 in Q1 2024 [27] Business Line Data and Key Metrics Changes - Power Analog Solutions revenue was $39.9 million, up 9.1% year over year and down 8.3% quarter over quarter [15][22] - Power IC revenue was $4.9 million, an increase of 44.1% year over year but down 10% sequentially [20][22] - The industrial segment saw an 8.7% year-over-year decline, while the communication segment increased nearly 64% year over year [16][17] Market Data and Key Metrics Changes - The communication market accounted for 23% of Power Analog Solutions revenue and saw significant growth due to design wins in smartphones [17] - The automotive segment showed strong year-over-year growth, expanding beyond Korea and Japan [19] Company Strategy and Development Direction - The company plans to shut down its display business by the end of Q2 2025 to focus on power semiconductor operations [6][24] - The strategic pivot aims to achieve a $300 million annual revenue run rate with a 30% gross profit margin target within three years, referred to as the "three-three-three strategy" [8][37] - The company expects to attain quarterly adjusted EBITDA breakeven from continuing operations by the end of 2025 [31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from an unpredictable macroeconomic landscape but remains optimistic about achieving growth targets [7][36] - The company expects mid single-digit sequential growth in Q2 2025, driven by strong performance in industrial and computing markets [36] Other Important Information - The company has initiated a stock buyback program, repurchasing approximately 300,000 shares for $1.1 million in Q1 2025 [27] - The expected cash inflow from the liquidation of the display business is estimated to be between $15 million to $20 million over two years [32] Q&A Session Summary Question: Impact of tariffs on manufacturing and markets - Management indicated minimal direct shipment to the U.S. and believes tariff risks are manageable at the moment [42][43] Question: Drivers for gross margin improvement - The company plans to upgrade its Gumi facility to support new generation power products, which is expected to enhance gross margins over the next few years [44][45] Question: Focus on Power IC vs. Power Analog segments - Management aims for double-digit growth in both Power Analog and Power IC segments, indicating a balanced focus on both areas for growth [46]

[PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section provides the unaudited interim consolidated financial statements and management's discussion and analysis of the company's financial condition and results of operations [Item 1. Interim Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Interim%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents Magnachip Semiconductor Corporation's unaudited consolidated financial statements for the first quarter of 2025, detailing balance sheets, statements of operations, comprehensive loss, changes in stockholders' equity, and cash flows [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show total assets decreased to **$373.9 million** by March 31, 2025, with Q1 2025 revenue of **$44.7 million** and a net loss of **$8.9 million** Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $132,654 | $138,610 | | Total current assets | $215,474 | $219,229 | | Total assets | $373,867 | $379,316 | | Total current liabilities | $47,787 | $46,268 | | Total liabilities | $104,666 | $102,519 | | Total stockholders' equity | $269,201 | $276,797 | Consolidated Statement of Operations Highlights (in thousands) | Account | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Total revenues | $44,722 | $43,438 | | Gross profit | $9,362 | $6,359 | | Operating loss | ($6,288) | ($9,391) | | Loss from continuing operations | ($5,082) | ($14,284) | | Net loss | ($8,878) | ($15,417) | | Diluted loss per share | ($0.24) | ($0.40) | Consolidated Statement of Cash Flows Highlights (in thousands) | Cash Flow Activity | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($4,669) | ($3,972) | | Net cash used in investing activities | ($389) | ($1,468) | | Net cash provided by (used in) financing activities | ($1,455) | $25,244 | | Net decrease (increase) in cash | ($5,956) | $13,510 | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail accounting policies and financial data, notably the reclassification of the Display business as a discontinued operation and specifics on inventory, debt, and the company's single Power solutions segment - On April 6, 2025, the Board of Directors approved a plan to shut down the Company's Display business to transition into a pure-play Power company, now classified as a discontinued operation[36](index=36&type=chunk) Results from Discontinued Operations (in thousands) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net sales | $9,556 | $5,629 | | Gross profit | $3,117 | $2,609 | | Operating loss | ($3,824) | ($4,068) | | Loss from discontinued operations, net of tax | ($3,796) | ($1,133) | - As of March 31, 2025, the company had an outstanding term loan of approximately **$27.3 million** with Korea Development Bank (KDB), secured by its Gumi properties[67](index=67&type=chunk)[70](index=70&type=chunk)[181](index=181&type=chunk) - The company operates as a single operating segment, the Power solutions business, with Q1 2025 revenue from this segment at **$44.7 million**, an increase from **$39.9 million** in Q1 2024[79](index=79&type=chunk)[82](index=82&type=chunk) - Under its stock repurchase program, the company bought back **296,835 shares** for **$1.1 million** in Q1 2025, and an additional **612,184 shares** for **$1.9 million** in April 2025[89](index=89&type=chunk)[93](index=93&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's transition to a pure-play Power company, analyzing Q1 2025 financial performance, liquidity, capital resources, and new financing agreements [Overview and Recent Developments](index=28&type=section&id=Overview%20and%20Recent%20Developments) This section outlines the company's power semiconductor business, its strategic decision to shut down the Display business, and new financing agreements for capital expenditures and working capital - On April 6, 2025, the Board approved a plan to shut down the Display business to focus investments on the Power Analog Solutions and Power IC businesses[105](index=105&type=chunk)[117](index=117&type=chunk) - The shutdown of the Display business is estimated to have a total cash cost of **$12-$15 million**, expected to be offset by **$15-$20 million** in cash inflows from the sale of "end of life" products and IP monetization over approximately two years[118](index=118&type=chunk)[119](index=119&type=chunk) - The company secured a KRW **40 billion** (approx. **$29.8 million**) working capital term loan from KDB in March 2024 and a credit agreement for up to KRW **38 billion** (approx. **$26.5 million**) in CAPEX loans in December 2024[121](index=121&type=chunk)[124](index=124&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Q1 2025 total revenues increased **3.0%** to **$44.7 million**, driven by the Power solutions business, resulting in a **47.2%** gross profit increase and a narrowed operating loss Q1 2025 vs Q1 2024 Performance (in millions) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenues | $44.7 | $43.4 | +3.0% | | Power Solutions Revenue | $44.7 | $39.9 | +12.1% | | Gross Profit | $9.4 | $6.4 | +47.2% | | Gross Margin | 20.9% | 14.6% | +6.3 p.p. | | Operating Loss | ($6.3) | ($9.4) | +33.0% | | Loss from Cont. Ops | ($5.1) | ($14.3) | +64.3% | - The increase in Power solutions revenue was driven by higher demand for power products like MOSFETs in communication applications and Power IC products for televisions and OLED IT devices[163](index=163&type=chunk) - The year-over-year increase in gross profit margin was primarily attributable to the appreciation of the U.S. dollar against the Korean Won in Q1 2025[165](index=165&type=chunk) - Net foreign currency loss improved to **$0.4 million** in Q1 2025 from a loss of **$5.0 million** in Q1 2024, contributing to the reduced net loss[172](index=172&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company held **$132.7 million** in cash, with management confident in sufficient liquidity for the next 12 months, despite **$4.7 million** cash used in operations - Cash and cash equivalents were **$132.7 million** as of March 31, 2025, and the company believes it has sufficient cash to fund operations and capital expenditures for the next 12 months[12](index=12&type=chunk)[182](index=182&type=chunk) - Net cash used in operating activities was **$4.7 million** for Q1 2025, compared to **$4.0 million** used in Q1 2024[184](index=184&type=chunk) - Capital expenditures for 2025 are expected to be in the range of **$26–$28 million**, including **$14-15 million** for new investments in the Gumi fabrication facility, partially funded by the Equipment Financing Credit Agreement[190](index=190&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[196](index=196&type=chunk) - There were no material changes to the company's internal control over financial reporting during the quarter ended March 31, 2025[197](index=197&type=chunk) [PART II OTHER INFORMATION](index=47&type=section&id=PART%20II%20OTHER%20INFORMATION) This section provides additional information, including risk factors and details on the company's stock repurchase program [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) The company reports no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - There have been no material changes to the risk factors disclosed in the company's 2024 Form 10-K[204](index=204&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's Q1 2025 stock repurchase activity, where **296,835 shares** were bought back for **$1.1 million** under its **$50 million** program Stock Repurchase Activity - Q1 2025 | Period | Total Shares Purchased (Program) | Average Price Paid per Share | Approximate Dollar Value Remaining (in thousands) | | :--- | :--- | :--- | :--- | | January 2025 | 31,254 | $3.95 | $24,465 | | February 2025 | — | — | $24,465 | | March 2025 | 265,581 | $3.71 | $23,489 | | **Total** | **296,835** | **$3.74** | **$23,489** | - The stock repurchases are part of a **$50 million** stock buyback program authorized by the Board of Directors on July 19, 2023[208](index=208&type=chunk)[87](index=87&type=chunk)

[First Quarter 2025 Results Summary](index=1&type=section&id=First%20Quarter%202025%20Results%20Summary) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlights consistent year-over-year growth and a strategic plan to achieve $300 million annual revenue and 30% gross margin - The company is implementing a "3-3-3 strategy" targeting **$300 million in annual revenue**, a **30% gross margin**, and a three-year execution timeline to drive structural improvements and profitability[5](index=5&type=chunk) - In Q1, **27 new-generation PAS products** were released, with plans to launch over **40 in 2025** and approximately **55 more in 2026**, targeting Industrial, Automotive, Consumer, and Communication markets[5](index=5&type=chunk) - The shutdown of the Display business is projected to reduce annualized operating expenses by **30% to 35%**, supporting a shift towards a more efficient and profitable business model[5](index=5&type=chunk) - Q1 2025 gross margin from continuing operations increased to **20.9%**, up from **17.6% in Q1 2024** and exceeding guidance[5](index=5&type=chunk) [Q1 2025 Highlights](index=1&type=section&id=Q1%202025%20Highlights) Q1 2025 continuing operations revenue reached **$44.7 million**, up **12.1% year-over-year**, driven by strong PAS and Power IC growth and 50 design-wins Q1 2025 Performance vs. Guidance and Prior Year | Metric | Q1 2025 Actual | Q1 2025 Guidance | YoY Change (Continuing Ops) | | :--- | :--- | :--- | :--- | | **Revenue (Continuing Ops)** | $44.7M | $42.0M - $47.0M | +12.1% | | **Gross Margin (Continuing Ops)** | 20.9% | 18.5% - 20.5% | +3.3 ppts | - The Power Analog Solutions (PAS) revenue from the Communication market grew **64% year-over-year**[6](index=6&type=chunk) - The Power IC (PIC) business revenue increased by **44.1% year-over-year**, driven by strength in TV-LED and OLED power ICs[6](index=6&type=chunk) - Secured **50 design-wins** in Q1, a **13.6% increase** from 44 wins in Q1 2024, including new generation Super Junction and low-voltage MOSFET products[6](index=6&type=chunk) - Repurchased approximately **0.3 million shares for $1.1 million** during the quarter, ending with a cash balance of **$132.7 million**[6](index=6&type=chunk) [Q1 2025 Financial Performance](index=2&type=section&id=Q1%202025%20Financial%20Performance) Q1 2025 core Power solutions revenue reached **$44.7 million**, up **12.1% year-over-year**, resulting in a GAAP operating loss of **$6.3 million** Q1 2025 Financial Results (GAAP) | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | **Consolidated Revenues** | $44.7M | $51.2M | $43.4M | | *Power solutions business* | *$44.7M* | *$48.9M* | *$39.9M* | | **Consolidated Gross Profit Margin** | 20.9% | 21.7% | 14.6% | | *Power solutions business* | *20.9%* | *23.2%* | *17.6%* | | **Operating Loss** | ($6.3M) | ($7.8M) | ($9.4M) | | **Loss from continuing operations** | ($5.1M) | ($8.7M) | ($14.3M) | | **Diluted Loss per Share (Continuing)** | ($0.14) | ($0.24) | ($0.37) | Q1 2025 Financial Results (Non-GAAP) | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | **Adjusted Operating Loss** | ($5.4M) | ($4.5M) | ($8.6M) | | **Adjusted EBITDA** | ($2.1M) | ($0.5M) | ($4.8M) | | **Adjusted Loss (Continuing Ops)** | ($3.8M) | $4.6M (Income) | ($9.8M) | | **Adjusted EPS (Diluted)** | ($0.10) | $0.12 | ($0.26) | [Financial Guidance](index=2&type=section&id=Financial%20Guidance) [Q2 2025 Guidance](index=2&type=section&id=Q2%202025%20Guidance) Magnachip projects Q2 2025 continuing operations revenue between **$45 million and $49 million**, with a consolidated gross profit margin of **19.5% to 21.5%** Q2 2025 Guidance | Metric | Q2 2025 Guidance Range | Mid-point vs. Q1 2025 ($44.7M) | Mid-point vs. Q2 2024 ($44.1M) | | :--- | :--- | :--- | :--- | | **Revenue (Continuing Ops)** | $45M - $49M | +5.2% | +6.6% | | **Gross Profit Margin** | 19.5% - 21.5% | N/A | N/A | [Full-Year 2025 Guidance](index=3&type=section&id=Full-Year%202025%20Guidance) The company reiterates full-year 2025 guidance for mid-to-high single-digit revenue growth and a gross profit margin of **19.5% to 21.5%** Full-Year 2025 Guidance | Metric | Full-Year 2025 Guidance | | :--- | :--- | | **Revenue Growth (YoY)** | Mid-to-high single digit % (vs. $185.8M in 2024) | | **Gross Profit Margin** | 19.5% - 21.5% (vs. 21.5% in 2024) | [Financial Statements](index=5&type=section&id=Financial%20Statements) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2025 total revenues were **$44.7 million** from Power solutions, resulting in a **$6.3 million** operating loss and a total net loss of **$8.9 million** Q1 2025 Statement of Operations (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Total revenues** | $44,722 | $43,438 | | **Gross profit** | $9,362 | $6,359 | | **Operating loss** | $(6,288) | $(9,391) | | **Loss from continuing operations** | $(5,082) | $(14,284) | | **Loss from discontinued operations, net of tax** | $(3,796) | $(1,133) | | **Net loss** | $(8,878) | $(15,417) | | **Diluted loss per Share (Total)** | $(0.24) | $(0.40) | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were **$373.9 million**, with **$132.7 million** in cash and **$104.7 million** in total liabilities Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $132,654 | $138,610 | | **Total current assets** | $215,474 | $219,229 | | **Total assets** | $373,867 | $379,316 | | **Total current liabilities** | $47,787 | $46,268 | | **Total liabilities** | $104,666 | $102,519 | | **Total stockholders' equity** | $269,201 | $276,797 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For Q1 2025, net cash outflow was **$6.0 million**, with **$4.7 million** used in operating activities, ending the period with **$132.7 million** in cash Cash Flow Summary for Three Months Ended March 31 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(4,669) | $(3,972) | | **Net cash used in investing activities** | $(389) | $(1,468) | | **Net cash provided by (used in) financing activities** | $(1,455) | $25,244 | | **Net (decrease) increase in cash** | $(5,956) | $13,510 | | **Cash at end of period** | $132,654 | $171,602 | [Non-GAAP Financial Measures Reconciliation](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) [Reconciliation of Operating Loss to Adjusted Operating Loss](index=8&type=section&id=Reconciliation%20of%20Operating%20Loss%20to%20Adjusted%20Operating%20Loss) Q1 2025 GAAP operating loss of **$6.3 million** was reconciled to a non-GAAP Adjusted Operating Loss of **$5.4 million**, primarily by excluding equity-based compensation Reconciliation of Operating Loss to Adjusted Operating Loss (in thousands) | Line Item | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | **Operating loss– continuing operations (GAAP)** | $(6,288) | $(7,837) | $(9,391) | | Equity-based compensation expense | $868 | $1,780 | $828 | | Other charges | $— | $1,589 | $— | | **Adjusted Operating Loss– continuing operations (Non-GAAP)** | $(5,420) | $(4,468) | $(8,563) | [Reconciliation to Adjusted EBITDA and Adjusted Income (Loss)](index=9&type=section&id=Reconciliation%20to%20Adjusted%20EBITDA%20and%20Adjusted%20Income%20(Loss)) Q1 2025 GAAP loss from continuing operations of **$5.1 million** was adjusted to a non-GAAP Adjusted EBITDA of **-$2.1 million** and an Adjusted Loss of **$3.8 million** Reconciliation to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | **Loss from continuing operations (GAAP)** | $(5,082) | $(8,732) | $(14,284) | | Adjustments (Interest, Tax, D&A, etc.) | $1,765 | $(8,349) | $3,690 | | **EBITDA – continuing operations** | $(3,317) | $(17,081) | $(10,594) | | Further Adjustments (Stock Comp, FX, etc.) | $1,244 | $16,615 | $5,791 | | **Adjusted EBITDA – continuing operations (Non-GAAP)** | $(2,073) | $(466) | $(4,803) | Reconciliation to Adjusted Income (Loss) (in thousands) | Line Item | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | **Loss from continuing operations (GAAP)** | $(5,082) | $(8,732) | $(14,284) | | Adjustments (Stock Comp, FX, Tax Effect, etc.) | $1,267 | $13,366 | $4,448 | | **Adjusted Income (Loss) – continuing operations (Non-GAAP)** | $(3,815) | $4,634 | $(9,836) |

Core Points - Methanex Corporation held its Annual General Meeting on May 1, 2025, in Vancouver, British Columbia, with a total of 55,396,544 common shares voted, representing 82.2% of all outstanding shares [1][2] Voting Results - All items of business were approved by shareholders, including the election of all director nominees with high approval rates, such as Doug Arnell receiving 99.75% of votes for [2] - The re-appointment of KPMG LLP as auditor was approved with 73.04% of votes for, while 26.96% of votes were withheld [3] - An advisory vote on executive compensation was accepted with 80.76% of votes for, indicating strong shareholder support for the company's compensation approach [3] Company Overview - Methanex is the world's largest producer and supplier of methanol, publicly traded on the Toronto Stock Exchange under the symbol "MX" and on the Nasdaq under "MEOH" [3]

Group 1 - Methanex Corporation has successfully restarted its 1.8 million tonne methanol plant, Geismar 3 (G3), in Geismar, Louisiana, after an unplanned outage in late February [1] - Methanex is the world's largest supplier of methanol and is publicly traded on the Toronto Stock Exchange under the symbol "MX" and on the Nasdaq under "MEOH" [2] - The company is based in Vancouver, British Columbia, and provides information about its operations on its official website [2]

Financial Performance - For Q1 2025, Methanex reported net income of $111 million, or $1.44 per diluted share, compared to $45 million, or $0.67 per diluted share in Q4 2024 [3][17] - Adjusted EBITDA for Q1 2025 was $248 million, up from $224 million in Q4 2024 [3][17] - The average realized price in Q1 2025 was $404 per tonne, an increase from $370 per tonne in Q4 2024 [7][17] Production and Sales - Total production for Q1 2025 was 1,619,000 tonnes, down from 1,868,000 tonnes in Q4 2024, primarily due to a planned turnaround at Geismar 2 and an unplanned outage at Geismar 3 [6][17] - Methanex-produced methanol sales volume was 1,703,000 tonnes in Q1 2025, compared to 1,455,000 tonnes in Q4 2024 [7][17] - Total sales volume for Q1 2025 was 2,217,000 tonnes, down from 2,564,000 tonnes in Q4 2024 [8][17] Operational Highlights - Geismar produced 617,000 tonnes in Q1 2025, down from 839,000 tonnes in Q4 2024 due to maintenance and outages [18] - Chile's production increased to 429,000 tonnes in Q1 2025 from 387,000 tonnes in Q4 2024, attributed to improved reliability [19] - Egypt's production decreased to 136,000 tonnes in Q1 2025 from 155,000 tonnes in Q4 2024, impacted by gas availability [22] Financial Position - At the end of Q1 2025, Methanex had a cash balance of $1,087 million, or $1,031 million excluding non-controlling interests [7][17] - The company returned $12.5 million to shareholders through dividends in Q1 2025 [7][17] - The acquisition of OCI Global's international methanol business is expected to close in Q2 2025 [7][17] Outlook - Production guidance for 2025 is expected to be lower than the previously guided 7.5 million tonnes due to the unplanned outage at Geismar 3 [24] - Lower Adjusted EBITDA is anticipated in Q2 2025 compared to Q1 2025, primarily due to reduced produced sales and lower average realized prices [25]

Industry Overview - The analog/mixed signal semiconductor market is expected to continue growing in 2025, following a strong performance in 2024, despite macro and geopolitical uncertainties [1] - The World Semiconductor Trade Statistics (WSTS) projects double-digit growth in semiconductors this year, with a 12.3% increase in integrated circuit (IC) growth, driven by various segments [2] - The semiconductor industry is cyclical, with players often serving multiple markets to offset individual seasonality [6] Growth Drivers - The automotive market is experiencing growth due to electrification and increased electronics usage in vehicles, although uncertainty remains due to China's dominant role [4] - AI is a significant growth driver, with AI chips expected to grow 33% this year, and 47% of total AI chip revenue coming from the PC market [11] - The industrial end market faces challenges due to macroeconomic factors, but long-term growth prospects remain strong due to new technology adoption [3][12] Company Insights - **Magnachip Semiconductor Corp. (MX)** focuses on power IC and discrete businesses, with plans to launch next-gen power products that will enhance revenue opportunities in automotive and industrial sectors [29][30] - The company aims to achieve a $300 million annual revenue run-rate with a 30% gross margin in three years, with expectations of improved financial performance in 2026 [32] - **Semtech Corp. (SMTC)** is positioned in attractive markets with a focus on portfolio optimization, R&D investment, and margin expansion, expecting revenue and earnings growth in the coming years [37][39] Market Performance - The semiconductor industry has lost 24.7% of its value over the past year, underperforming compared to the broader sector and S&P 500 [22] - The industry currently trades at a forward P/E ratio of 21.83X, which is at its 52-week low but still a premium compared to the S&P 500 [25] Future Outlook - The semiconductor market is projected to see strong growth in 2025, with Gartner estimating a revenue growth of 12.6%, driven by high bandwidth memory [7] - Despite current challenges, the industry's positioning in the top 50% of Zacks-ranked industries indicates strong near-term prospects [18][19]