Himax(US:HIMX)2025-05-08 13:00Financial Performance - Q1 2025 revenue was $215.1 million, a sequential decrease of 9.3% but a year-over-year increase of 3.7% [6] - Gross margin was 30.5%, consistent with guidance and up from 29.3% year-over-year [6][12] - Profit per diluted ADS was $0.01, exceeding guidance due to lower operating expenses [7] - Operating income was $19.8 million, representing 9.2% of sales, compared to 4.8% a year ago [12] - Cash and cash equivalents totaled $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] - Small and medium-sized display driver revenue was $150.5 million, reflecting a sequential decline of 9.8% [10] - Automotive driver IC sales rose nearly 20% year-over-year, making it the largest revenue contributor, accounting for over 15% of total sales [10][26] - Non-driver sales reached $39.6 million, a 12.8% decrease from the previous quarter [11] Market Performance - Automotive IC sales showed resilience with a single-digit decline, while overall automotive driver IC sales are expected to decline mid-teens sequentially in Q2 [10][31] - Smartphone and tablet driver sales are expected to decline mid-teens and grow high teens respectively in Q2 [34] - The company is expanding its presence in the OLED market, particularly in automotive applications [35] Company Strategy and Industry Competition - The company is focusing on maintaining a healthy balance sheet while driving sustainable long-term growth through high dividends and share repurchases [15] - Himax is deepening its supply chain in Taiwan and strengthening its presence in China, Korea, and Singapore to mitigate geopolitical risks [24] - The company is committed to innovative fields such as ultra-low power AI and AR glasses, which are expected to contribute to revenue growth [27] Management Commentary on Operating Environment and Future Outlook - Management expressed concerns over macroeconomic uncertainties and the impact of U.S. tariffs on customer demand [22][58] - The company anticipates low visibility for the second half of the year due to ongoing tariff negotiations and economic conditions [57] - Despite challenges, Himax expects to achieve growth in new technology areas such as TDDI and TCOM, where it holds a significant market share [60] 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 [53] Question: Do you have guidance for 2025? How do you see demand in the second half? - The company does not provide full-year guidance but notes low visibility due to macro uncertainties and customer concerns regarding government stimulus effectiveness [57][58] Question: Comment on the Obsidian investment. - The investment in Obsidian is seen as a strategic fit due to its unique thermal imaging technology complementing Himax's CMOS image sensors [61][63]