Silicon Motion 3Q25 Earnings Highlights NASDAQ: SIMO October 31, 2025 Safe Harbor Statement This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements regarding trends in the consumer electronics and semiconductor industries, any future growth projections or expectations in such markets and our fu ...

Core Insights - Silicon Motion Technology Corporation reported strong financial results for the third quarter of 2025, with net sales reaching $242.0 million, a 22% increase quarter-over-quarter and a 14% increase year-over-year [3][7] - The company experienced significant growth in its eMMC and UFS products, driven by a recovering smartphone market and market share gains, alongside a 45% increase in PCIe5 client SSD controller sales [5][10] Financial Highlights - Net income (GAAP) for Q3 2025 was $39.1 million, or $1.16 per diluted ADS, compared to $16.3 million, or $0.49 per diluted ADS in Q2 2025 [3][4] - Non-GAAP net income for Q3 2025 was $33.8 million, or $1.00 per diluted ADS, up from $23.0 million, or $0.69 per diluted ADS in Q2 2025 [4][8] - Gross margin for Q3 2025 was 48.6% (GAAP) and 48.7% (non-GAAP), while operating margin was 12.1% (GAAP) and 15.8% (non-GAAP) [2][8] Business Performance - The company reported a 20% to 25% increase in SSD controller sales quarter-over-quarter and a 35% to 40% increase in eMMC and UFS controller sales year-over-year [7] - The automotive segment continued to grow, supported by product diversification and new customer acquisitions [5] Future Outlook - Management anticipates continued revenue growth in Q4 2025, projecting revenue between $254 million and $266 million, representing a 5% to 10% increase quarter-over-quarter and a 33% to 39% increase year-over-year [11] - The company plans to introduce several new products in 2026, which are expected to drive higher market share and improved average selling prices [10]

Core Insights - Silicon Motion Technology Corporation reported strong financial results for Q3 2025, with net sales reaching $242.0 million, a 22% increase quarter-over-quarter and a 14% increase year-over-year [2][3][7] - The company experienced significant growth in its eMMC and UFS products, driven by a recovering smartphone market and market share gains [5][10] - The outlook for Q4 2025 remains positive, with expectations of continued revenue growth and the introduction of new products across various segments [10][11] Financial Highlights - **Net Sales**: $242.0 million, up from $198.7 million in Q2 2025 [3][6] - **Net Income (GAAP)**: Increased to $39.1 million, or $1.16 per diluted ADS, from $16.3 million, or $0.49 per diluted ADS in Q2 2025 [3][4][8] - **Gross Margin**: 48.6% for GAAP and 48.7% for non-GAAP [2][6] - **Operating Margin**: 12.1% for GAAP and 15.8% for non-GAAP [2][8] - **Earnings per Diluted ADS**: $1.16 (GAAP) and $1.00 (non-GAAP) [4][8] Business Performance - **Product Growth**: SSD controller sales grew 45% quarter-over-quarter, with eMMC and UFS controller sales increasing by 20% to 25% quarter-over-quarter and 35% to 40% year-over-year [5][7] - **Automotive Segment**: Continued growth driven by product diversification and new customer acquisitions [5] - **Market Position**: The company is well-positioned for long-term growth due to its expanding product portfolio in consumer, enterprise, automotive, and industrial storage solutions [5][10] Shareholder Returns - The Board of Directors declared a $2.00 per ADS annual cash dividend, with quarterly installments of $0.50 per ADS [9][10] Future Outlook - The company anticipates revenue growth exceeding the previously announced full-year revenue run rate target of $1 billion [10][11] - New product introductions in 2025 are expected to ramp up in 2026, contributing to higher market share and improved margins [10][11]

Core Viewpoint - The article emphasizes the importance of confirming the sustainability of stock trends for successful short-term investing, highlighting the use of a specific screening strategy to identify stocks with strong fundamentals and positive price momentum. Group 1: Trend Analysis - The trend in short-term investing is crucial, and confirming its sustainability is essential for profitability [1][2] - A predefined screening strategy, "Recent Price Strength," helps identify stocks with sufficient fundamental strength to maintain their upward trend [3] Group 2: Stock Performance - Silicon Motion (SIMO) has shown a solid price increase of 34.6% over the past 12 weeks, indicating strong investor interest [4] - SIMO's price has increased by 9.8% in the last four weeks, suggesting that the upward trend is still intact [5] - Currently, SIMO is trading at 94.8% of its 52-week high-low range, indicating a potential breakout [5] Group 3: Fundamental Strength - SIMO holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6] - The Zacks Rank system has a strong historical performance, with Rank 1 stocks averaging a +25% annual return since 1988 [7] - The Average Broker Recommendation for SIMO is also 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7] Group 4: Additional Opportunities - Besides SIMO, there are other stocks that meet the criteria of the "Recent Price Strength" screen, suggesting further investment opportunities [8] - The article encourages exploring over 45 Zacks Premium Screens tailored to different investing styles for potential winning stock picks [8]

Core Viewpoint - Silicon Motion Technology Corporation has announced an annual cash dividend of $2.00 per ADS, reflecting confidence in its business recovery and commitment to returning cash to shareholders [1][3]. Dividend Declaration - The Board of Directors has declared an annual dividend of $2.00 per ADS, to be paid in four quarterly installments of $0.50 per ADS [2]. - The anticipated record and payment dates for the dividend are as follows: - November 14, 2025 (Payment on November 26, 2025) - February 11, 2026 (Payment on February 26, 2026) - May 7, 2026 (Payment on May 21, 2026) - August 6, 2026 (Payment on August 20, 2026) [2]. Business Performance - The company reports a rebound in business and normalization of margins due to an improved outlook in the memory industry [3]. - The company emphasizes the importance of distributing a significant portion of its strong cash flow to shareholders as a priority [3]. Dividend Payment Conditions - Future cash dividends are subject to the Board's determination that such payments are in the best interests of shareholders and comply with applicable laws and agreements [4]. - The payment of dividends will be made according to the anticipated record and payment dates unless changed by the Board [4]. Company Overview - Silicon Motion is a global leader in supplying NAND flash controllers for solid-state storage devices, with a strong market presence in SSD controllers for servers, PCs, and other client devices [6]. - The company is the leading merchant supplier of eMMC and UFS embedded storage controllers used in smartphones and IoT devices, serving major NAND flash vendors and OEMs [6].

Summary of Conference Call on Greater China Semiconductors Industry Overview - The semiconductor industry, particularly memory segments (DRAM, NAND, NOR Flash), is experiencing an unprecedented supercycle driven by AI demand [1][2][3] - Chinese memory players are aggressively expanding capacity to meet rising demand [1][2] Key Points on DRAM - **DDR4 Shortage**: Expected to continue until at least Q4 2026, with a projected 10-15% undersupply over the next three quarters, potentially worsened by back-end constraints [2][10][12] - **Price Increases**: Nanya Tech reported a preliminary revenue increase of 79% Q/Q, with average selling prices (ASPs) expected to rise at least 20% Q/Q as market dynamics favor sellers [2][11] - **Long-term Outlook**: Mainstream DRAM players are likely to focus on DDR5 and HBM, providing minimal support for DDR4, which is expected to see a significant decline in demand [14][15] Key Points on NAND - **Demand Divergence**: NAND demand is increasing significantly in AI applications, with CSPs doubling their NL eSSD orders for 2026 [3][48] - **Projected Shortages**: Anticipated 2% NAND shortage in 2026, with a bull case projecting up to an 8% shortage by year-end [3][48] - **Price Expectations**: NAND pricing is expected to rise by at least mid-teens percentage in 2026, benefiting companies like Phison [3][48] Key Points on NOR Flash - **Pricing Support**: NOR pricing is expected to remain well-supported due to capped supply growth and potential demand from IoT applications [4] - **Market Dynamics**: AirPods could account for 5-10% of global NOR demand by 2026, indicating sustained price hikes into 2026 [4] Company-Specific Insights - **Price Target Adjustments**: Price targets raised for Nanya Tech (from NT$90 to NT$110), Phison (from NT$800 to NT$1,000), and Silicon Motion (from US$88 to US$100) [7] - **Investment Recommendations**: Companies like Nanya Tech, Winbond, and GigaDevice are favored due to their positioning in the memory upcycle [5][16] - **Earnings Forecasts**: Phison's EPS forecasts have been revised upward by 3% for 2026 and 6% for 2027, reflecting strong NAND pricing trends [68] Additional Insights - **Localization Trends**: Ongoing localization of wafer fab equipment in China is expected to strengthen the domestic semiconductor industry [59][60] - **Capacity Expansion**: CXMT and YMTC are set to expand their capacities significantly, with CXMT potentially exceeding 300k wpm in the long term [61][62] Conclusion - The semiconductor industry, particularly in memory segments, is poised for significant growth driven by AI demand and capacity expansions from Chinese players. Companies like Nanya Tech, Phison, and SIMO are well-positioned to benefit from these trends, with favorable pricing dynamics expected to continue into 2026 and beyond.

Core Insights - Silicon Motion Technology Corporation, a leader in NAND flash controllers, will release its Q3 2025 financial results on October 30, 2025, followed by a conference call on October 31, 2025 [1][2] Company Overview - Silicon Motion is the global leader in supplying NAND flash controllers for solid state storage devices, providing more SSD controllers than any other company for servers, PCs, and client devices [3] - The company is also the leading merchant supplier of eMMC and UFS embedded storage controllers used in smartphones, IoT devices, and other applications [3] - Silicon Motion's customer base includes major NAND flash vendors, storage device module makers, and leading OEMs [3]

Core Insights - Silicon Motion's stock closed at $98.85, down 3.15% from the previous day, underperforming the S&P 500's slight gain of 0.01% [1] - Over the past month, Silicon Motion's shares increased by 25.75%, significantly outperforming the Computer and Technology sector's gain of 10.49% and the S&P 500's gain of 4.83% [1] Earnings Performance - Upcoming earnings per share (EPS) for Silicon Motion are projected at $0.88, reflecting a 4.35% decrease year-over-year [2] - Revenue is estimated to be $227.87 million, indicating a 7.28% growth compared to the same quarter last year [2] Annual Forecast - For the entire year, earnings are forecasted at $3.35 per share and revenue at $840.76 million, showing changes of -2.33% and +4.63% respectively from the previous year [3] - Recent analyst estimate revisions suggest confidence in the company's business performance and profit potential [3] Valuation Metrics - Silicon Motion has a Forward P/E ratio of 30.45, which is higher than the industry average of 25 [6] - The company has a PEG ratio of 4.33, compared to the Computer - Integrated Systems industry's average PEG ratio of 1.82 [6] Industry Context - The Computer - Integrated Systems industry is ranked 19th by Zacks, placing it in the top 8% of over 250 industries [7] - Strong industry rankings correlate with stock performance, with the top 50% of rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Core Insights - The semiconductor industry is experiencing significant growth, with several stocks showing strong momentum gains, placing them in the top 10th percentile of their peers [1][2]. Company Performance - Amtech Systems Inc. (ASYS) has seen its momentum score rise from 89.38 to 91.51, reflecting a year-to-date increase of 58.93% and a 54.25% increase over the past year [8]. - Lam Research Corp. (LRCX) increased its momentum score from 89.14 to 91.51, with a year-to-date rise of 102.91% and an 81.22% increase over the last year [8]. - Silicon Motion Technology Corp. (SIMO) experienced a momentum score jump from 89.91 to 92.49, with an 86.77% increase year-to-date and a 67.36% increase over the past year [8]. - Wolfspeed Inc. (WOLF) led with a dramatic momentum score rise from 2.57 to 99.26, achieving a year-to-date increase of 272.40% and a 186.76% increase over the last year [8]. Market Trends - The substantial gains in these chipmakers suggest a bullish trend, likely driven by increasing demand for advanced semiconductor technologies [9].

Core Insights - The article compares Hewlett Packard Enterprise (HPE) and Silicon Motion (SIMO) to determine which stock is more attractive to value investors [1] Valuation Metrics - HPE has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while SIMO has a Zacks Rank of 3 (Hold) [3] - HPE's forward P/E ratio is 12.56, significantly lower than SIMO's forward P/E of 27.03 [5] - HPE has a PEG ratio of 1.99, while SIMO's PEG ratio is 3.84, suggesting HPE is more reasonably priced relative to its expected earnings growth [5] - HPE's P/B ratio is 1.29, compared to SIMO's P/B of 3.9, indicating HPE is undervalued relative to its book value [6] - Based on these metrics, HPE holds a Value grade of B, while SIMO has a Value grade of D [6] Earnings Outlook - HPE is noted for its improving earnings outlook, making it a more appealing option for value investors compared to SIMO [7]