Drive for better vision 2025 Q4 and Full Year Earnings Updates : HIMX Forward Looking Statements Factors that could cause actual events or results to differ materially from those described in this conference call include, but are not limited to, the effect of the Covid-19 pandemic on the Company's business; general business and economic conditions and the state of the semiconductor industry; market acceptance and competitiveness of the driver and non-driver products developed by the Company; demand for end- ...

Financial Performance - Third quarter revenue was $199.2 million, representing a sequential decline of 7.3%, which outperformed the guidance range of a 12.0%-7.0% decline, primarily driven by better-than-expected sales for automotive IC and T-CON product lines [4][5] - Gross margin was 13.2%, in line with guidance of around 13% [5] - Q3 profits per diluted ADS were $0.006, substantially exceeding the guidance range of a loss of $0.02-$0.04 [5][10] - Operating loss was $0.6 million, representing a negative operating margin of 0.3%, compared to 8.4% in the previous quarter [10] - Cash balance as of September 13, 2025, was $278.2 million, down from $332.8 million in the previous quarter [11] Business Line Performance - Revenue from large display driver ICs was $19.0 million, a decline of 23.6% from the previous quarter, accounting for 9.5% of total revenues [5][6] - Revenue from small and medium-sized display driver segments totaled $141.0 million, reflecting a slight decline of 2.4% [5][6] - Automotive driver sales increased single-digit quarter-over-quarter, indicating resilient underlying demand despite global softness in automotive sales [6][15] - Non-driver sales reached $39.2 million, a 13.7% decrease from the previous quarter [7][8] Market Data - The automotive display IC business accounted for over 50% of total revenues, with demand visibility remaining low as customers maintain lean inventory levels [15][25] - Himax holds a solid 40% market share in traditional DDIC and remains a key supplier for both legacy and next-generation automotive display applications [26][28] Company Strategy and Industry Competition - Himax is focusing on expanding into emerging areas beyond display ICs, including ultra-low-power AI, CPO, and smart glasses, which are expected to become new growth drivers [15][18] - The company maintains a leadership position in automotive display ICs, with a strong pipeline of design wins and ongoing innovation in display technologies [16][26] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the automotive business outlook for the next few years, backed by leading technology offerings and comprehensive customer coverage [15][16] - The automotive market is showing signs of bottoming out, but a strong recovery is not anticipated next year, with expectations of a mild recovery [50][51] - Management highlighted the importance of diversifying the supply chain in response to customer requests for geographical diversification [51] Other Important Information - Third quarter operating expenses increased by 34.2% from the previous quarter, primarily due to annual bonus compensation [8][9] - The company is actively engaged in R&D for new technologies, including WiseEye AI and CPO, with expectations for significant revenue contributions starting in 2027 [18][49] Q&A Session Summary Question: Why is the EPS guidance for Q4 conservative despite better revenue and gross margin guidance? - Management explained that the conservative EPS guidance is due to an income tax adjustment and higher R&D expenses scheduled for Q4 [42][43] Question: What is the timeline for meaningful revenue from the CPO business? - Management indicated that while they expect to be ready for volume production in 2026, significant revenue contributions are anticipated starting in 2027 [46][49] Question: What is the outlook for automotive market products in 2026? - Management believes the automotive market is showing signs of bottoming out but does not anticipate a strong recovery next year, budgeting for a mild recovery [50][51]

Financial Performance & Guidance - Q2 2025 revenue reached $214.8 million [4] - Q2 2025 gross margin exceeded guidance at 31.2% [4] - Q2 2025 EPS was 9.5 cents, within the guidance of 8.5 to 11.5 cents [5] - Q3 2025 revenue is expected to decrease by 12% to 17% QoQ [28] - Q3 2025 net loss is projected to be 2.0 cents to 4.0 cents per diluted ADS [28] Segment Performance - SMDDIC (Small & Medium Display Driver IC) revenue in Q2 2025 was $144.5 million [7], a decrease of 4.0% QoQ [11] - LDDIC (Large Display Driver IC) revenue in Q2 2025 was $24.9 million [7], a decrease of 0.6% QoQ [10] - Non-Driver revenue in Q2 2025 was $45.4 million [7], an increase of 14.7% QoQ [16] Business Outlook & Strategy - The company maintains a conservative outlook for Q3 and is controlling expenses while reducing procurement costs [30] - The company is accelerating geographic diversification of foundry & backend to address customer needs [30] - The company holds the No 1 global market share across all segments of auto display ICs [31]