Diodes(US:DIOD)2021-11-04 03:33Financial Data and Key Metrics Changes - Revenue for Q3 2021 was a record $471.4 million, an increase of 7% from $440.4 million in Q2 2021 [13] - Gross profit for Q3 2021 was $181.2 million, representing 38.4% of revenue, an increase of 13% from $159.8 million or 36.3% of revenue in Q2 2021 [13] - GAAP net income for Q3 2021 was a record $68.4 million or $1.50 per diluted share, a 23% increase compared to $1.22 per diluted share in Q2 2021 [16] - EBITDA for Q3 2021 was a record $114.5 million or 24.3% of revenue, compared to $99.4 million or 22.6% of revenue in the prior quarter [18] Business Line Data and Key Metrics Changes - Automotive revenue grew over 65% year-over-year and 7% sequentially, contributing to an eight-year CAGR of 30% [10][27] - Industrial market revenue reached a quarterly record, growing 66% over the prior year and 17% sequentially [30] - Computing market revenue grew over 140% year-over-year, driven by record Pericom revenue [34] Market Data and Key Metrics Changes - Asia represented 80% of revenue, Europe 12%, and Americas 8% in Q3 2021 [25] - In terms of end markets, computing represented 30% of revenue, industrial 24%, consumer 18%, communication 16%, and automotive 12% [26] Company Strategy and Development Direction - The company aims for a target of $1 billion in gross profit on $2.5 billion in revenue and 40% gross margin by 2025 [12] - The strategy includes content expansion initiatives and a total solution sales strategy to drive design-ins and design wins [38][59] Management's Comments on Operating Environment and Future Outlook - Management noted that the backlog remains strong and has not seen significant changes in customer behavior regarding inventory rebalancing [40] - The company expects revenue for Q4 2021 to increase to approximately $476 million, which is better than typical seasonality [23] Other Important Information - Cash flow generated from operations was $98.9 million for Q3 2021, with free cash flow of $57.8 million [19] - Total inventory days increased to approximately 99 in Q3 2021, with total inventory dollars increasing to approximately $322.1 million [22] Q&A Session Summary Question: Market share gains in the quarter - Management indicated that market share gains were across all product lines, not just Pericom, driven by content expansion and design wins [38] Question: Supply constraints and shipping - Management acknowledged supply constraints but noted that the backlog remains strong and customer demand is being understood to overcome bottlenecks [40] Question: Seasonal guidance and end markets - Management stated that strength is seen across all markets, particularly in automotive, industrial, and computing, with consumer-related low-end PCs being slightly softer [42] Question: Capacity expansion efforts - Management discussed ongoing capacity expansion by converting smaller wafers to larger ones and ramping up production in various fabs [49] Question: Gross margin improvements - Management indicated that gross margin improvements are primarily due to manufacturing efficiency and product mix rather than price increases [56]