Financial Data and Key Metrics Changes - Fourth quarter revenue was $203.1 million, a sequential increase of 2.0% quarter-over-quarter, with gross margin at 30.4%, consistent with guidance [4][5] - Full year 2025 revenue totaled $832.2 million, a decline of 8.2% compared to 2024, with net profit at $43.9 million, down from $79.8 million in 2024 [11][14] - Operating profit for Q4 was $6.8 million, representing an operating margin of 3.4%, compared to -0.3% in the previous quarter [10] Business Line Data and Key Metrics Changes - Revenue from large display driver IC was $21.7 million, a sequential increase, accounting for 10.7% of total revenue [5] - Small and medium-sized display driver revenue was $139.1 million, reflecting a slight decline of 1.3% sequentially, while automotive driver sales increased approximately 10% quarter-over-quarter [6][7] - Non-driver sales reached $42.3 million, a 7.9% increase from the previous quarter, with T-CON business accounting for over 10% of total sales [8] Market Data and Key Metrics Changes - Automotive driver sales showed resilience, growing single-digit year-over-year despite softness in global automotive markets [6] - The small and medium-sized display driver IC segment accounted for 68.5% of total sales for the quarter, down from 70.8% in the previous quarter [7] - The automotive display IC business is expected to remain strong, with a 40% market share in automotive DDIC and over half in the global TDDI market [20][33] Company Strategy and Development Direction - The company is focusing on expanding into ultra-low power AI for endpoint devices and smart glasses, leveraging advancements in AI technology [21][25] - Himax aims to complete mass production readiness for CPO technologies in 2026, with significant revenue contributions expected starting in 2027 [28][57] - The automotive market is seen as a significant growth area, driven by innovations in smart cabins and advanced display technologies [21][33] Management's Comments on Operating Environment and Future Outlook - The management noted ongoing macroeconomic uncertainties and price increases in memory affecting market sentiment [19] - The first quarter of 2026 is expected to be the trough of the year, with sales anticipated to rebound in the second quarter [19] - Management expressed optimism about long-term growth in the automotive display IC business, supported by a strong design win pipeline [20] Other Important Information - Operating expenses for Q4 were $54.9 million, a decrease of 9.6% from the previous quarter, attributed to reduced annual bonuses [9] - The company had $286.2 million in cash and cash equivalents as of December 31, 2025, an increase from the previous year [14] - Capital expenditure for 2025 was $20.1 million, up from $13.1 million in 2024, primarily for R&D-related equipment [17] Q&A Session Summary Question: What is the outlook for gross margin in Q1? - Management indicated that gross margin is expected to be flat to slightly down due to product mix changes and ongoing material cost pressures [47][48] Question: Can you provide guidance on CPO revenue for 2026 and 2027? - Management stated that revenue contribution from CPO will be limited in 2026, with meaningful contributions expected starting in 2027 as they finalize product validation [52][54] Question: What is the expected contribution of OLED sales in 2026? - Management noted that OLED sales are expected to contribute less than 10% of total sales in 2026, with a significant ramp-up anticipated in 2027 [60][61]

Financial Performance - Fourth quarter revenue was $203.1 million, a sequential increase of 2.0% quarter-over-quarter, with gross margin at 30.4%, consistent with guidance [4][5] - Full year 2025 revenue totaled $832.2 million, a decline of 8.2% compared to 2024, with operating income at $44.1 million or 5.3% of sales [11][13] - Q4 profit per diluted ADS was $0.036, at the high end of the guidance range of $0.02-$0.04 [5] Business Segment Performance - Revenue from large display driver IC was $21.7 million, a sequential increase, accounting for 10.7% of total revenue [5][6] - Small and medium-sized display driver revenue totaled $139.1 million, reflecting a slight decline of 1.3% sequentially, while automotive driver sales increased approximately 10% quarter-over-quarter [6][7] - Non-driver sales reached $42.3 million, a 7.9% increase from the previous quarter, with T-CON business accounting for over 10% of total sales [8] Market Performance - Automotive driver sales showed resilience despite softness in global automotive markets, with full-year growth outpacing the broader market [6][11] - The small and medium-sized display driver IC segment accounted for 68.5% of total sales for the quarter, down from 70.8% in the previous quarter [7] Company Strategy and Industry Competition - The company is focusing on expanding into ultra-low power AI for endpoint devices and smart glasses, leveraging advancements in AI technology [21][25] - Himax aims to capture increasing semiconductor content as automotive display technologies evolve from LCD to OLED, with a strong design win pipeline [35][36] Management Commentary on Operating Environment and Future Outlook - Management noted ongoing macroeconomic uncertainty and price increases in memory affecting market sentiment, but expects sales to rebound in the second quarter [19][20] - The automotive display IC business is projected to remain strong, supported by new technology offerings and a robust design win pipeline [20][21] Other Important Information - Operating expenses for Q4 were $54.9 million, a decrease of 9.6% from the previous quarter, attributed to reduced annual bonuses and currency depreciation [9] - The company had $286.2 million in cash and cash equivalents as of December 31, 2025, an increase from the previous year [14] Q&A Session Summary Question: First quarter gross margin outlook - Management indicated that gross margin is expected to be flat to slightly down due to product mix changes and ongoing material cost pressures [47][48] Question: CPO revenue guidance for 2026 and 2027 - Management stated that revenue contribution from CPO will be limited in 2026 due to validation processes, with potential meaningful contributions starting in 2027 [52][54] Question: OLED sales expectations - Management noted that OLED sales are expected to grow significantly in 2027, with automotive and IT OLED products enjoying better margins compared to smartphone OLEDs [60][63]

Financial Performance - Q1 2025 revenue was $215.1 million, a sequential decrease of 9.3% but a year-over-year increase of 3.7% [6][7] - Gross margin was 30.5%, consistent with guidance and up from 29.3% year-over-year [6][7] - Q1 profit per diluted ADS was $0.01, exceeding guidance due to lower operating expenses [7][12] - Operating income was $19.8 million, representing 9.2% of sales, compared to 4.8% a year ago [12] - Cash and cash equivalents were $281 million, up from $277.4 million a year ago [13] Business Line Performance - Revenue from large display drivers was $25 million, flat from the previous quarter, driven by demand from Chinese government subsidies [7][9] - Small and medium-sized display driver revenue totaled $150.5 million, reflecting a sequential decline of 9.8% [9][10] - Automotive driver IC sales rose nearly 20% year-over-year, making it the largest revenue contributor [10][11] - Non-driver sales reached $39.6 million, a 12.8% decrease from the previous quarter [10][11] Market Performance - Automotive IC sales showed resilience with a single-digit decline, while overall automotive driver IC sales rose nearly 20% year-over-year [9][10] - Smartphone and tablet driver sales declined as expected amid a subdued festival season [10][11] - The automotive market remains a key focus, with Himax holding a 40% share in DDIC and over 50% in TDDI [34][36] Company Strategy and Industry Competition - Himax is focusing on maintaining a healthy balance sheet while driving sustainable long-term growth through high dividends and share repurchases [15] - The company is deepening its supply chain in Taiwan and strengthening its presence in China, Korea, and Singapore to mitigate geopolitical risks [24][25] - Himax is committed to innovative fields such as ultra-low power AI, AR glasses, and co-packaged optics, which are expected to contribute to revenue growth [26][28] Management Commentary on Operating Environment and Future Outlook - Management expressed concerns about macroeconomic uncertainties and the impact of U.S. tariffs on customer demand [19][24] - The company anticipates a conservative revenue outlook for Q2 2025, reflecting cautious customer sentiment amid global economic uncertainties [24][60] - Despite challenges, Himax remains confident in its growth potential in new technology areas, particularly TDDI and TCOM [62] Other Important Information - The company announced an annual cash dividend of $0.037 per ADS, totaling $64.5 million, with a payout ratio of 81.1% of the previous year's profits [15] - Capital expenditures for Q1 were $5.2 million, primarily for R&D related equipment [15] Q&A Session Summary Question: Could you explain the validation process for CPO? - The validation process involves collaboration with leading customers and foundry partners, focusing on current and newly developed products [56] Question: Do you have guidance for 2025? - The company does not provide full-year guidance due to macroeconomic uncertainties but acknowledges low visibility for the second half of the year [59][60] Question: What is the outlook for the automotive market? - Management noted concerns about the effectiveness of future government stimulus programs in China and the potential impact on automotive demand [60][62] Question: Comment on the Obsidian investment? - The investment aligns with Himax's technology, enhancing thermal imaging capabilities and offering unique applications [63][64]