Silicon Motion Announces Results for the Period Ended June 30, 2025

Core Viewpoint - Silicon Motion Technology Corporation reported a strong recovery in its business for the second quarter of 2025, with net sales reaching $198.7 million, a 19% increase quarter-over-quarter but a 6% decrease year-over-year [2][4]. Financial Highlights - Net sales for 2Q 2025 were $198.7 million, up from $166.5 million in 1Q 2025, but down from $210.7 million in 2Q 2024 [5][6]. - Gross margin for 2Q 2025 was 47.7%, compared to 47.1% in 1Q 2025 and 45.9% in 2Q 2024 [5][6]. - Operating margin for 2Q 2025 was 11.2%, significantly lower than 14.6% in 2Q 2024 [5][6]. - Earnings per diluted ADS were $0.49 (GAAP) and $0.69 (non-GAAP) for 2Q 2025, compared to $0.58 (GAAP) and $0.60 (non-GAAP) in 1Q 2025 [5][6][3]. Business Performance - The company experienced over 75% growth in PCIe5 client SSD controller sales quarter-over-quarter, driven by the increasing market traction of AI-at-the-edge PCs and strong sales of eMMC and UFS products due to better-than-expected smartphone sales [4][10]. - SSD controller sales remained flat to a slight increase of 0% to 5% quarter-over-quarter but decreased by 15% to 20% year-over-year [6][10]. - eMMC and UFS controller sales increased by 40% to 45% quarter-over-quarter and by 10% to 15% year-over-year [6][10]. Shareholder Returns - The company declared a $2.00 per ADS annual cash dividend, with $16.7 million paid to shareholders as the third installment [8]. - A new share repurchase program was authorized for up to $50 million, but no shares were repurchased in 2Q 2025 [9][8]. Future Outlook - The company anticipates a stronger second half of 2025, targeting a revenue run rate of $1 billion as it ramps up new products, including a 6nm, 8-channel PCIe5 client SSD controller and a new automotive portfolio [10][11]. - Management expects 3Q 2025 revenue to be between $219 million and $228 million, reflecting a 10% to 15% increase quarter-over-quarter [11].