Core Insights - TSMC held a board meeting on the 13th, confirming its Q1 2025 financial results, which met market expectations with consolidated revenue of NT$839.25 billion and net profit of NT$361.56 billion, translating to earnings per share of NT$13.95 [2] - The board approved a cash dividend of NT$5.00 per share for Q1 2025, with the ex-dividend date set for September 16 and the actual payment date on October 9 [3] - TSMC's board also approved a new capital budget of approximately US$15.248 billion for expanding advanced process capacity and facilities, aligning with the previously disclosed annual capital expenditure range of US$38 to US$42 billion [4] - The company approved the sale of certain machinery to VSMC, a joint venture with NXP Semiconductors, for an estimated total transaction amount between US$71 million and US$73 million, enhancing its mature process manufacturing capabilities [5] - In personnel changes, the board appointed a new head of internal audit and a new accounting supervisor to ensure seamless transitions in high-level financial management roles [6]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported a net income of $20.5 million and operating income of $69.4 million, with net cash provided by operating activities at $54.7 million [12] - The average revenue per horsepower reached an all-time high of $21.6, reflecting a 1% increase sequentially and a 6% increase year-over-year [12] - The adjusted gross margin for Q1 was nearly 67%, consistent with previous quarters [12][14] Business Line Data and Key Metrics Changes - The total fleet horsepower at the end of Q1 was approximately 3.9 million horsepower, unchanged from the prior quarter, while revenue-generating horsepower was flat sequentially but up 2% year-over-year [13] - Average utilization for the first quarter was 94.4%, slightly down from 94.5% in the prior quarter [13] Market Data and Key Metrics Changes - The company holds the largest contract compression fleet in the Northeast, totaling around 900,000 horsepower, benefiting from strong demand in the data center market [7][8] - Key upstream companies in the Permian and Northeast reaffirmed their full-year capital production targets despite softening commodity prices [7] Company Strategy and Development Direction - The company is focused on disciplined growth, particularly in acquiring large horsepower, while monitoring market conditions closely [6][10] - The transition of IT and HR functions has been completed, with an ERP implementation planned for Q1 2026 to improve business management [11] Management's Comments on Operating Environment and Future Outlook - Management noted that while commodity prices have softened, the compression business is sustained by long-term agreements, making it less susceptible to short-term price fluctuations [10] - The company anticipates maintaining adjusted operating margins around 67% and is committed to reducing its leverage ratio while funding new growth projects [14][15] Other Important Information - The company has completed its idle to active initiative, with large horsepower utilization remaining close to fully utilized [6] - A promotion of Chris Wasson to Chief Operating Officer was highlighted, recognizing his leadership in the Permian operations [10] Q&A Session Summary Question: Guidance for 2025 - Management confirmed maintaining the guidance range of $590 million to $610 million for adjusted EBITDA, with Q1 performance aligning with the midpoint of this range [20][21] Question: Growth Outlook Beyond 2025 - Management indicated strong interest in 2026 proposals, with ongoing discussions and RFPs being undertaken despite current macroeconomic uncertainties [22][24] Question: Operating Horsepower Growth - The addition of 40,000 horsepower in Q1 was noted as below the full-year forecast, but management expressed confidence in meeting year-end targets [27][28] Question: Contracting Environment - Management stated that there has not been a significant change in contract duration or terms, with a preference for longer-term agreements to mitigate risks [36][37] Question: Lead Times and Manufacturing - Lead times for equipment remain stable, with no significant changes expected unless tariffs impact the market [38][39] Question: Asset Sales and Portfolio Optimization - Management confirmed ongoing efforts to optimize the portfolio through modest asset sales and swaps, aiming to improve overall efficiency [42][43]