Himax Technologies, Inc. Reports Fourth Quarter and Full Year 2023 Financial Results; Provides First Quarter 2024 Guidance

Core Viewpoint - Himax Technologies reported Q4 2023 financial results that exceeded guidance, with revenues of $227.7 million and an after-tax profit of $23.6 million, while providing a cautious outlook for Q1 2024 due to expected revenue declines and ongoing market challenges [1][5][11]. Financial Performance - Q4 2023 revenues were $227.7 million, a decrease of 4.5% QoQ, but above the guidance range of a 5.0% to 11.0% decline [1][5]. - Gross margin for Q4 2023 was 30.3%, down from 31.4% in the previous quarter but within the guidance range [1][5]. - After-tax profit for Q4 2023 was $23.6 million, or 13.5 cents per diluted ADS, compared to $11.2 million, or 6.4 cents last quarter [1][10]. - Full year 2023 revenues totaled $945.4 million, reflecting a 21.3% decline compared to 2022, with a gross margin of 27.9% [11][14]. Business Segments - Revenue from large display drivers in Q4 2023 was $33.6 million, a sequential decrease of 23.1%, primarily due to weak macroeconomic conditions [6]. - Small and medium-sized display driver revenue reached $163.1 million, a sequential increase of 1.2%, driven by TDDI products for automotive and tablet markets [7]. - Automotive business continued to be the largest revenue contributor, accounting for over 45% of total sales in Q4 2023, with TDDI sales increasing high teens sequentially [7][12]. Strategic Focus - The company revealed its strategic focus for the upcoming years at CES 2024, emphasizing automotive, WiseEye AI, and optical technologies [1][20]. - Himax remains optimistic about its automotive business, anticipating that automotive sales will expand to over 40% of total sales in 2024, up from 36% in 2023 [1][20]. - The introduction of LTDI technology for automotive displays marks a significant advancement, with mass production initiated for Geely Auto's NEVs [1][27]. Inventory and Cost Management - Following aggressive destocking, inventory levels decreased to near historical norms by the end of 2023, allowing for a more stable outlook in 2024 [1][13]. - Operating expenses for Q4 2023 were $52.3 million, a decrease of 17.9% from the previous quarter, reflecting strict budget control measures [9][14]. Market Outlook - For Q1 2024, the company expects revenues to decline by 9% to 16% QoQ, with a gross margin around 28.5% and profit per diluted ADS in the range of 2.0 to 5.0 cents [1][42]. - The company is actively implementing strategies to optimize costs and diversify suppliers to enhance supply flexibility and cost-effectiveness amid sluggish demand [2][19].